Churches may from time to time desire to expand an existing church building or purchase a larger building. In order to do this, the church may decide to “accumulate funds” over a period of more than one year to have funds in hand to carry out the expansion or relocation. This may have impact to the church’s disbursement quota (as reported on the T3010) since tax-receiptable funds received in one year may not be used or spent until more than one year in the future. To avoid a possible disbursement quota problem, consideration should be made to seek permission from the Canada Revenue Agency (CRA) to accumulate funds. CRA does not have a prescribed form for this; however, to ask for permission to accumulate funds, send a letter with the following information:
- the specific purposes 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 church;
- the name and registration number of the church;
- the effective date or starting date to accumulate funds
The letter may be faxed to the Charities Directorate at (613) 954-8037.