Accumulated Fund - Explained
What is an Accumulated Fund in a Non-Profit?
Written by J. Mance Gordon
Updated at April 18th, 2024
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Table of Contents
What is an Accumulated Fund?How is an Accumulated Fund Used?Academic Research for Accumulated FundWhat is an Accumulated Fund?
An association, charity, club, or any non-profit organization can have an accumulated fund. Money goes into the accumulated fun when the non-profit organization has extra income, that is when revenues are higher than expenses. Deficits are also withdrawn from accumulated fund in cases of liabilities, when the revenues are lower compared to the expenditure or expenses.
How is an Accumulated Fund Used?
Oftentimes, non-profit organizations have funds that accumulates money over a specific period of time to serve a particular purpose. Organizations such as charitable associates, clubs and societies set aside money to cater for specific purposes. The accumulated fund might be set aside to buy facilities, equipment, machinery, fixed assets, real estate or even capital assets. Organizations also use accumulated funds to provide liquidity or capital when there are shortages. For example, an organization that normally make charitable donations of $100,00 annually, and has a deficit of $1,000 for a particular year can withdraw $1,000 from its accumulated fun to cover up for the deficiency.