What is an 'Accumulated Fund'

An accumulated fund is the capital fund of a nonprofit organization. Money is directed into the accumulated fund when revenues are greater than expenditures and there is a budgetary surplus. Money is directed away from the accumulated fund (withdrawn) when expenditures are greater than revenues and there is a budgetary deficit. The term accumulated fund can also be used as a generic term to describe any fund that accumulates money over time for a particular purpose, although it is most commonly used in conjunction with a nonprofit organization.

BREAKING DOWN 'Accumulated Fund'

Nonprofit organizations, such as clubs, societies and charities, have capital accounts known as accumulated funds. Accumulated funds include money that is set aside for the purchase of capital or fixed assets, including real property and certain equipment. The fund can also be used for the purpose of providing liquidity in times of budgetary deficits.

Example of an Accumulated Fund

For example, if XYZ Organization makes monetary gifts each year that total $100,000 and XYZ only brings in $99,000 for the year, it can take $1,000 from its accumulated fund to gift its full $100,000 amount for the year. If the following year it generates $150,000 but only gifts $100,000, it would hold the remaining $50,000 in the accumulated fund.

RELATED TERMS
  1. Accumulation

    Accumulation refers to how retirement wealth is built, how an ...
  2. Asset Accumulation

    Asset accumulation is the increase in financial assets held through ...
  3. Accumulated Earnings Tax

    The accumulated earnings tax is imposed by the government on ...
  4. Accumulation Unit

    An accumulation unit is 1) the value invested in a variable annuity ...
  5. Accumulation Area

    The accumulation area is a stock market charting zone analyzed ...
  6. Accumulated Depreciation

    Accumulated depreciation is the cumulative depreciation of an ...
Related Articles
  1. Financial Advisor

    Where to Find Non-Profit Finance Jobs

    The non-profit sector offers a stable selection of jobs for those who seek other types of fulfillment from their jobs than just purely financial.
  2. Taxes

    How Your Government's Budgetary Decisions Impact the Public Sector

    Issues facing the public sector are not unlike some issues facing America’s oldest and largest companies, but with larger and broader impacts.
  3. Financial Advisor

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  4. Investing

    The 4 Best American Funds for Growth Investors in 2016

    Discover four excellent growth funds from American Funds, one of the country's premier mutual fund families with a history of consistent returns.
  5. Taxes

    5 steps to forming a tax-exempt nonprofit corporation

    Before you tackle this challenge, know the challenges of forming and operating an official nonprofit organization.
  6. Taxes

    6 Financial Strategies for Nonprofits

    With limited funds and resources, it's important for non-profits to follow these strategies.
  7. IPF - Banking

    Introduction To Money Market Mutual Funds

    Learn about the easiest way to benefit from money market securities.
  8. Investing

    Closing Mutual Funds: Investment Protection Or Trap?

    Discover the characteristics of closing funds, the reasons why they close and key factors to consider.
RELATED FAQS
  1. What would cause a decrease in accumulated depreciation?

    Understand what causes a decrease in a company's accumulated depreciation. Learn why a company's accumulated depreciation ... Read Answer >>
  2. What happens to accumulated depreciation when you sell an asset?

    Learn what happens to a company's accumulated depreciation when it sells an asset. Understand why accumulated depreciation ... Read Answer >>
  3. How does accumulated depreciation affect net income?

    Learn why accumulated depreciation does not directly affect a company's net income; understand where a company accounts for ... Read Answer >>
  4. Why does accumulated depreciation have a credit balance on the balance sheet?

    Wonder why accumulated depreciation is a credit account, despite residing on the asset side of the balance sheet? Why not ... Read Answer >>
Hot Definitions
  1. Socially Responsible Investment - SRI

    Socially responsible investing looks for investments that are considered socially conscious because of the nature of the ...
  2. Business Cycle

    The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles ...
  3. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  4. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  5. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  6. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
Trading Center