'Master Fund Strategy' for legacy donations under the assumption of annual compounding

In recent issues of this journal, Solow, Symes and Webb (2023, 2024) present a new way to structure legacies by creating an intermediate fund which they call a Master Fund. They prove some interesting properties of this approach, comparing it with the traditional approach whereby the whole bequest is transferred to a Charity Fund. Their main mathematical results are obtained under continuous compounding, and numerical results are derived under (a more realistic) annual compounding assumption. In this note, additional practical results are obtained mathematically under the assumption of annual compounding. Specifically, it is shown that using a Master Fund always results in a time after which the annual amount of money a beneficiary organization receives is greater than that without using the Master Fund. While the foregoing statement might not be true for the net present value, conditions on the annual investment, disbursement and discount rates under which this is the case are also provided.