Request permission to accumulate

Notice to the reader

As a result of Budget 2010, the information below applies only for fiscal years ending before March 4, 2010.

Permission to accumulate funds helps a registered charity to temporarily accumulate funds in order to make a major expenditure, such as buying a building or a costly piece of equipment, which cannot be financed out of its current revenue without the charity incurring a spending shortfall (not meeting its disbursement quota).

The permission allows a registered charity to apply funds toward meeting its disbursement quota while it is still accumulating them rather than when they are actually spent. In the year the charity uses the funds, that expense cannot be applied to meet the charity's disbursement quota for that year.

To ask for permission, send a letter with the following information:

  • the specific purpose for which the funds will be used;
  • the amount required;
  • the length of time needed to accumulate the funds (minimum 3 years and maximum 10 years);
  • the signature of a director/trustee or other authorized representative of the charity;
  • the name and the registration number of the charity; and
  • the effective date (starting date).

Mail or fax the letter to:

Charities Directorate
Canada Revenue Agency
Ottawa ON  K1A 0L5

Fax: 613-954-8037


If approved, the charity will receive a letter confirming the amount that can be accumulated, the specific purpose for which it was granted and the number of years for which the accumulation can continue.

The funds accumulated for a fiscal year, including any income earned on the accumulated amount, should be reported on line 5500 of the T3010 return. Accumulated funds spent for a fiscal year should be reported on line 5510.

Unused accumulated amount

If a charity does not spend the entire accumulated amount before the end of the agreed time period, or if circumstances change and the accumulation must be abandoned, the charity must treat the unused accumulation amount as a tax-receipted gift in the final year of the accumulation period. This means that 80% of the remaining accumulated amount will be added to the charity's disbursement quota in the following year. The amount deemed to be a tax-receipted gift for the fiscal year should be reported on line 5520.

If the charity needs more time to accumulate funds or wants to change the approved amount, it must apply in writing to the Charities Directorate.

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