Is the building of graves for the poor and needy mentioned in the Prophetic narrations, or is it an ijtihad from Muslims as a perpetual charity, and does it carry a great reward?

The prohibition of building over graves and plastering them, and the one who does so is sinful. As for making bricks to close the opening above the deceased or planks to seal the niche (lahd), that is considered a charity, and the one who does it will be rewarded. And dedicating and endowing land to be cemeteries for the poor and needy is among the good deeds that fall under continuous charity (sadaqah (definition) jariyah). The Shari'ah encourages doing good, as Allah Almighty says: "And do good that you may succeed" [Al-Hajj:77]. No specific hadith (definition) has been reported concerning this type of good deed.