So here's the situation.  Donor makes a lump sum gift, and over the course of time agrees to how it will be spent.  We need to capture the purposes for which, at the end of the day, the gift was used (and, in the meantime, how much is left to be allocated). 

We also have donors who create family funds which pay out a certain sum each year to a project.  Sometimes the distribution is based on percentage, sometimes on actual growth.  Sometimes a restriction as to use is set in the establishing documents, sometimes it's an annual decision.  Nowhere in RE have we tracked where the money has gone or how much. 

Anyone have ideas as to how to handle situations like this? 

A. This is not typically done because of the donor control issue.  Once the gift is made it should not be in the donor's control any more.  It sounds like you are acting as a foundation managing a donor advised fund and I am not sure you should be doing this.  Or it is likley equivalent to someone putting the gift into a scholarship fund - the donor then can not legally advice on who gets the scholarship.  You may want to seek legal advice on this.

B. Even if you do this it is not something that a fundraising database is set up to do,  It should really only live in your finance software which is equipt to manage this type of information.  Your database is set up to handle what the restriction was at the time of the gift which sounds like it is a special fund.  RE can handle entering a specially named fund as the designation but can not report on what that fund actually spent.

I am, unfortunately, in the same situation.  Since we are so limited with what we can do as RE is merely a database, we have to make do with what we have.  I have created a fund called "specific purpose".  I then list as briefly as possible the gift restriction in the reference field.  As the purchase for this gift is made - or funds transferred for the restriction, I list "purchased w/date or transferred w/date" before the gift restriction in the reference field.  I then run the Fund report - using the reference field in my output - this allows me to see all of these donor and gift restrictions.  I check them monthly to ensure all gift restrictions are met.  For multi-year pledges, I note that these are tracked separated in excel, which unfortunately I have to do also.  At least it is some type of record for the next person to follow me if necessary.  It seems to work fine for us.  However, we only have about 5 to 10 or so of these gifts per month.  For a larger volume, this maybe more difficult.  At this point in time though, I track in excel about 30 multi-year projects.  I hope this helps.  I could not find an easier way to do this but when you are forced to work with what you have, this was the best I can do.  I hope this helps.