The money collected on the gofundme website was to be used to help Rania El-Alloul buy a car.
As of midday Friday, the campaign had raised more than $52,000 in donations from 1,000-plus people over 14 days.
The drive was in response to a judge's refusal on Feb. 24 to hear her case against Quebec's automobile insurance board, which had seized her vehicle.
El-Alloul said in a letter on the website that while she appreciates the financial support offered by the "generous and warm-hearted campaign," she can't accept the gift.
"The awareness raised by this campaign has brought us people from all over, who have offered support to carry this issue forward," El-Alloul wrote.
"As a result, I believe that these funds can be put to better use helping those whose rights have been forfeited and stories left untold."
Campaign organizers said they would like to earmark some of the money to help El-Alloul, who is pursuing legal action through the National Council of Canadian Muslims.
Amira Elghawaby, the council's human rights co-ordinator, said Friday it has been in discussions with El-Alloul for the past few weeks.
"We are getting legal opinions at the moment in terms of what's the best way forward for her," she said.
Elghawaby said El-Alloul has until March 24 to file a judicial complaint.
Quebec court Judge Eliana Marengo told El-Alloul her case would not be heard unless she removed her headscarf, saying it wasn't appropriate to wear in her courtroom.
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