What is the legitimate way to deal with donations in mosques, and is it permissible to distribute a portion of them to orphans, the poor, and the needy, or are they restricted solely to mosque affairs, especially since the donors seek the countenance of Allah or ongoing charity (Sadaqah Jariyah)? And does the mosque's refusal to spend from these funds except for its own interests contradict the spirit of Zakat or prevent ongoing charity?

The principle regarding donation funds is that they should be spent on the specific charitable purposes designated by the donor. If the donor did not specify a particular use, and the entity receiving the donations accepts them for a known and stated purpose, then it is not permissible to deviate from these purposes. If the donations are earmarked for the maintenance and expenses of mosques, they should not be used for anything else, as they are considered like an endowment (waqf). However, if the donations are general and not intended for a specific purpose, then every needy and poor person has a right to them.