A California company that processes donations to nonprofits went bankrupt and now owes $29 million to thousands of charities across the country — including more than $500,000 to organizations on the Central Coast.
Flipcause, which is now at least $10 million in debt, owes 33 individuals and organizations across San Luis Obispo, Santa Barbara and Monterey counties a total of $526,614 in undelivered donations.
The largest local creditor is 805UndocuFund, which is the core nonprofit that provides support and short-term financial relief to undocumented residents and their families on the Central Coast. The organization has been especially active in the past year amid increased local Immigration and Customs Enforcement (ICE) activity.
805UndocuFund is owed $352,500 — the sixth-largest amount owed by Flipcause to all of its 3,276 nonprofit creditors.
Executive director Primitiva Hernandez called it a “devastating” loss. “This situation is both enraging and deeply harmful,” Hernandez told The Tribune in a statement. “When a fundraising platform fails to responsibly manage and release charitable funds, it creates a serious breach of trust and causes real harm. The consequences fall directly on nonprofits and, more importantly, on the families who depend on those resources to survive crises.”
This is what happened when ICE raided a cannabis farm in Carpinteria in July and 805UndocuFund was left without its full resources to support the community.
“The money that we raised goes directly to families,” communications and media organizer Claudia Gonzalez told The Tribune. “We had that raid in July where these funds would’ve been very crucial, and instead we had to put families on a waiting list.”
What Does Flipcause Do?
Founded in 2012, Flipcause is an Oakland-based start-up that allows nonprofits to manage donors, register event attendees, recruit volunteers, sell products and accept donations online. On the clients’ end, the nonprofits request that donations made to them through Flipcause be delivered to their accounts, which were promised to arrive within five business days.
Flipcause touts itself as “the best fundraising platform for small nonprofits,” but according to multiple groups, their transfer requests haven’t been delivered on time or in full in years. Years of delayed or undelivered donations were unpinned by a three-year failed attempt to sell the company, which executive chairman Emerson Ravyn said in a court declaration was “not driven by financial distress.”
In December, Flipcause filed for Chapter 11 bankruptcy, which restructures the business to allow continued operations and repays creditors based on priority, meaning many are often left without full payment. The story was first broken by Oakland Voices in September.
In October, one nonprofit launched a punitive class-action lawsuit against Flipcause alleging a “nationwide scheme … to defraud and systematically deprive nonprofit organizations of the very funds they raised for their charitable missions.” It reached 29 plaintiffs by November, but the case has been paused while the company goes through bankruptcy.
How Much Money are Central Coast Nonprofits Owed?
Flipcause advertises to its clients that their funds are available in their account as soon as a transaction is processed: “You control when and how much you transfer — no waiting 30 days for a payout.”
But 805UndocuFund has been waiting over a year and a half for its payout. 805UndocuFund has been using Flipcause since May 2024, Gonzalez said, in which time it collected more than $360,500 in donations, according to court records.
However, the organization has only received one payment in that time — the first one it requested in January 2025 for $8,564. Even then, it wasn’t delivered for six months.
805UndocuFund reached out multiple times to request additional donation payments in April, May and June, but Flipcause said “bank transfer issues” prevented the delivery, and the company blamed its payment processor for the delays, Gonzalez said. 805UndocuFund was still being told this until as recently as December, she said.
The organization only heard about Flipcause’s bankruptcy and debts owed in late 2025, when community members notified them of news reports. Flipcause never directly contacted 805UndocuFund, she said.
Upon learning of the bankruptcy, 805UndocuFund shut down Flipcause’s donation portal on their website and set up a different and unrelated way to continue receiving funds online. But the immigration organization is still down $350,000, forcing it to operate on a strained budget during one of its most crucial and active years ever.
“These funds are not surplus funds for our organization, but strictly for families,” Hernandez, the executive director, said.
The loss disproportionately impacts families who have been separated or who have had their loved ones taken by ICE, especially if that person was the main breadwinner, she said. “When charitable funds are delayed or inaccessible, it is vulnerable communities — not corporations — who pay the price,” Hernandez said. “This case underscores the urgent need for accountability and stronger safeguards around platforms that handle charitable funds.”
805UndocuFund is within the seven largest unsecured creditors, which typically form a creditors’ committee in Chapter 11 bankruptcies to negotiate with the bankrupt entity, investigate its financial conduct and help formulate a repayment plan.
Flipcause’s top creditors are owed between $250,000 and $1.2 million each, with the highest amount owed to the Sweet Relief Musicians Fund in Brea, California, according to court filings.
“Nonprofits and donors should never be placed in a position where community-raised resources are put at risk,” Hernandez said. “Accountability is essential.”
17 Strong is another local nonprofit that had a similar experience but suffered a much smaller hit. Located in Pismo Beach, the organization sends adult cancer patients on victory trips — similar to the Make-A-Wish foundation, but for 18- to 40-year-olds. It is owed $11,864 — a figure that could’ve been much more had the nonprofit not realized something was off early-on.
17 Strong was a customer of Flipcause for eight years and began noticing late and incomplete payments for the last two, co-founder Holly Teixeira told The Tribune. The nonprofit fully moved payment platforms to Pushpay six months ago and hasn’t had trouble since.
“We got smart and realized the handwriting was on the wall,” she said. However, Flipcause still made a significant dent in 17 Strong’s operating budget, which mostly comes from donations. “That’s the backbone of nonprofits,” co-founder Steve Teixeira, Holly’s husband, said. “For us to take a $12,000 hit, the way I see it, that’s between two and three victory trips we can’t grant because we lost that money.”
Though they are glad to see the situation finally come to public light, the Teixeiras don’t have much hope the bankruptcy will result in any significant repayment. “They’ve really gotten away with it for a long time with no consequences,” Holly Teixeira said. “We shouldn’t be having to fight for our money.”
The Pacific Coast Conservation Alliance in Paso Robles is also owed a small amount of money, though not in donations. The conservation alliance is owed $810 for eight months of subscription fees charged after founder and president Bill Haas canceled their Flipcause subscription, he told The Tribune.
Haas had a better experience with Flipcause than most. In the seven years he was a client, Flipcause facilitated and delivered $35,000 to $40,000 in donations for the conservancy without issue, Haas estimated. He said the company sounded like “a bunch of kids” who “didn’t know how to do business,” but added that they “were easy to work with.”
He never had a problem with them until Flipcause overcharged him for the canceled subscription. “That’s $800 that doesn’t belong to me or my board,” Haas said. “They haven’t as much stolen from me or (the Pacific Coast Conservation Alliance) or the board. They stole from you, the public. That’s probably the worst thing.”
How Flipcause Went Bankrupt
For over a decade, Flipcause successfully operated through a subscription-based model that charged its nonprofit clients $1,500 to $2,400 dollars annually, according to court documents. It also charged a 6.9% plus 30-cent processing fee on each donation or online payment, which were processed through a third-party payment system, financial services giant Stripe. Flipcause filed for bankruptcy on Dec. 19.
With $20 million in reported assets — including $15 million in its website and “other intangibles” — and $30 million in liabilities, the company is at least $10 million in debt. Its employees and contractors are also owed $11,700 in unpaid wages. The bankruptcy was the result of a failed sale attempt, an effort that Flipcause had been pursuing since 2022, court records show.
Rather than being driven by “financial distress,” Ravyn, the executive chairman of Flipcause, framed the sale effort as an opportunity to “unlock value for stakeholders while positioning the platform for its next phase of growth.”
While expanding into an over $10 million revenue company, Flipcause incurred debt that was “manageable in ordinary operations” but “limited Flipcause’s ability to independently fund certain expansion initiatives or platform evolutions without introducing additional leverage or dilution,” Ravyn said in a court declaration.
The board and upper management decided a sale or partnership would be the best way to erase the debt and proceed. Flipcause hired an investment banker in 2023 with the intent to sell in then-favorable market conditions by 2024, and it received at least one credible letter of intent.
However, the market deteriorated, and no firm offer developed. The company held an auction in July 2025, but it received no bids. Flipcause then continued to seek buyers through November, but by late October it was clear it would not find one in time.
As its clients went unpaid for years, Flipcause had carried on with business as normal, hedging its bets on a sale that did not — nor would ever — exist. It was around that time, on Nov. 14, that the California Attorney General’s Office sent Flipcause a cease-and-desist letter demanding an immediate stop to its operations and up to $70,000 in penalties.
“Donors placed their trust in Flipcause to ensure their contributions reached those in need,” Attorney General Rob Bonta said in a news release. “Instead, charities are experiencing significant financial stress due to the platform holding these funds back. This is simply unacceptable. We are holding Flipcause accountable for withholding these funds and ensuring that every cent possible reaches those it was intended for.”
Flipcause appealed the cease and desist, which is pending, but the regulatory alarm-bell was likely enough to scare Flipcause’s third-party payment processor, Stripe.
On Dec. 4, Stripe notified Flipcause it had frozen its reserves and ceased business with the company with no further explanation, court records show. Stripe held $1.145 million of Flipcause’s clients’ donations at the time of the freeze, according to court records.
Flipcause has been unable to conduct business, deliver payments to its clients or generate revenue since. As a result, Flipcause filed for bankruptcy. Flipcause asked the court to order Stripe to resume services and release the funds, a motion that Stripe objected to at a Dec. 22 bankruptcy hearing, according to Oakland Voices.
Flipcause will continue to operate “core elements” of its platform during its restructuring, not including payment processing or the acceptance of new donations, according to a news release from the company that does not mention the word bankruptcy once.
Now, the bankruptcy estate is trying to orchestrate another sale through an auction on March 3, according to Oakland Voices. Ronald Gellert, Flipcause’s attorney, told The Tribune there are “a bunch of parties out there” interested in buying. However, none have yet to materialize.
“Right now, we are really focusing on trying to get to a place where it can sell for the most money to get that back into the hands of the nonprofits,” Gellert said. Ravyn did not respond to The Tribune’s request for comment, nor did Stripe.