Can a non-profit organization accumulate a surplus without risking its tax-exempt status?

To a point, yes — having some surplus or a reasonable reserve doesn't automatically disqualify an NPO from its tax-exempt status. Building up a sensible cushion for future needs, upcoming projects, or simply prudent financial management is generally consistent with operating as a non-profit organization.

The risk shows up when the pattern goes further than that: an NPO that consistently accumulates funds well beyond what it actually needs for its stated purposes, without spending that surplus on its exempt activities or maintaining a genuinely reasonable reserve, starts to look less like a non-profit and more like a taxable enterprise quietly building up capital. Since an NPO's tax exemption depends on it actually operating for its stated non-profit purpose, a persistent pattern of accumulation that isn't tied to a real organizational need can put that exemption at risk.

There's no fixed dollar line here — it's a question of degree and pattern over time, looked at against what the organization genuinely needs to fulfill its purpose. An NPO's board should be able to explain why it's holding the reserve it has, ideally with that reasoning documented, rather than simply letting a surplus grow year over year without a plan for it.