As part of the Penn State Lehigh Valley Writing Project, I believe in writing in context with grammar. That being said, I strongly urge each student to have a Writer's Notebook Entry, and within it, they can keep all of their entries associated with any type of writing in class as well as grammar. As their teacher, I also keep a Writer's Notebook of my own that I share on a daily basis with my class.
For this particular notebook entry, the teacher instructs the students as to what a gerund is. Then, the students create sentences of their own, based on what they just learned. Depending on what the teacher is currently covering in the class, that should be the basis for the creation of gerunds. For instance, if currently working on a unit of vocabulary, students can generate sentences using the vocabulary and gerunds.
You can integrate this into ANY PART of your curriculum.
Not only that, this grammar entry can be done in ANY CLASS, not just literature.