Based on your goals it does not appear that you could do all that you wish to do with only the annual payment of 225,000 so that alone may dictate that you want the lump sum.
If we assume you will not get all of the payments it can be calculated how long you have to get the annual payment to equal the lump sum.
Rough tax computations (leaving out your other current income) is that the annual payment of 225K would be taxed, at 2009 rates, at about 34,400 for a net after tax for comparision of about 190,000 per year.
The lump sum would incur about 1,227,000 tax for a net of about 2,512,000 total.
Without including the return on investment on unspent awards, it would take more than thirteen years at 190K per year to equal the 2,512K after tax lump sum.
Since you say that you may even use funds each year in addtion to the annual payment we will assume no return on unspent funds from the annual payment. Using a 5% return on the 2,512K lump sum (less an first annual 190K spent) you would have a bit more than 116K investment earnings in the year on the balance after the lump sum was received. These investment earnings would extend the period it would take to have the annual payment be equal the lump sum to something more like 20 year than 13 years. Exact figures would only be available if we know just how much you would spend each year and your actual earnings on the balance.
So, based on both your desire to use more than the annual payment and the assumption you will not receive any monies after your death the data says you will have to live more than twenty years for the annual payment to exceed the lump sum after taxes.
I hope this helps for rough estimates of after tax return on the annual as compared to the lump sum.
Bless you for including charitable contributions in your goals.
Edited by John Gordos EA on 11/10/2009 at 3:49 PM EST