Back to: ACCOUNTING, TAX, & REPORTING
Accumulated Fund Definition
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 Deficits are also withdrawn from accumulated fund in cases of liabilities, when the revenues are lower compared to the expenditure or expenses.
A Little More on What is an Accumulated Fund
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.
References for Accumulated Fund
Academic Research for Accumulated Fund
The social insurance paradox, Aaron, H. (1966). Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique, 32(3), 371-374.
Why do nonprofit managers accumulate surpluses, and how much do they accumulate?, Chang, C. F., & Tuckman, H. P. (1990). Nonprofit Management and Leadership, 1(2), 117-135.
Do donors penalize nonprofit organizations with accumulated wealth?, Calabrese, T. D. (2011). Public Administration Review, 71(6), 859-869.
Economic theories of nonprofit organizations, Steinberg, R. (2003). In The study of the nonprofit enterprise (pp. 277-309). Springer, Boston, MA.
Competition, commercialization, and the evolution of nonprofit organizational structures, Tuckman, H. P. (1998). Journal of Policy Analysis and Management: The Journal of the Association for Public Policy Analysis and Management, 17(2), 175-194.
Storing and shielding: financial management behaviour in a church organization, Lightbody, M. (2000). Accounting, Auditing & Accountability Journal, 13(2), 156-174.
The accumulation of nonprofit profits: A dynamic analysis, Calabrese, T. D. (2012). Nonprofit and Voluntary Sector Quarterly, 41(2), 300-324.
Internal revenue service 990 data: Fact or fiction?, Froelich, K. A., & Knoepfle, T. W. (1996). Nonprofit and Voluntary Sector Quarterly, 25(1), 40-52.
Tax-motivated expense allocations by nonprofit organizations, Yetman, R. J. (2001). The Accounting Review, 76(3), 297-311.