The Foundation's financials are open, so you can see how the money has been used in the past. The short version is that our 2014 budget was on track to spend about half that amount (i.e., approaching half a million) on funded project development, through permanent staff and development contracts. The other portion goes into supporting conferences, hardware purchases for the FreeBSD cluster, and staff time to support the FreeBSD project.

Keep in mind that this donation won't be spent in one year; we'll be able to find qualified uses for this money.