Oakland, California-based donation platform Flipcause owes more than $29 million to more than 3,200 nonprofit organizations across the United States, including $407,523.36 to 54 organizations in Wisconsin, bankruptcy records show.
The platform, founded in 2012, filed for federal bankruptcy protection in late December. In its filing, it listed 3,276 “unsecured creditors” — mostly nonprofit organizations that had used the platform to collect donations, according to reporting by Oakland Voices.
The amounts owed to 54 Wisconsin-based organizations range from $7 to $51,042.70.
Like other fundraising platforms such as GoFundMe, Flipcause collected online donations on behalf of nonprofit organizations, then dispersed the donations to those organizations, subtracting a small percentage as a service fee. However, organizations that used the platform began complaining of slow payouts several years ago.
Oakland Voices reported in September that more than 100 Flipcause clients were experiencing delays in payouts. A medical student association sued the company in October, according to Oakland Voices. In November, the California Attorney General ordered the company to stop doing business.
In its bankruptcy filing, Flipcause claimed to have $70,000 in one bank account, despite having collected nearly $30 million in donations that it never paid out to client organizations.
For at least one Wisconsin-based nonprofit, the trouble goes back much longer. Brandi Grayson, founder and CEO of Urban Triage, said she signed up for Flipcause about 10 years ago, before Urban Triage was even officially a nonprofit organization. Grayson said Urban Triage was organizing protests and demonstrations in the early days of the Black Lives Matter movement, and people wanted to donate.
“That was our first fundraising platform,” Grayson told Madison365 in an interview. “We were protesting. We were organizing in the street before we became a nonprofit … We didn’t know. We were just trying to figure out how to set up to collect the funds to do movement work. And that was the platform.”
She said the company told her they could set up an online donation portal, even though Urban Triage didn’t have a website. She said even back then, the company collected more than $24,000 and never paid out a cent.
“When I started, I didn’t know anything, so I was just looking for people that were willing to help,” she said. “I think they preyed on small organizations that didn’t know anything.”
Grayson said she never had a phone number to call. Emails got responses like “Oh, we’ll get it fixed,” Grayson said, until the emails ultimately got no response at all.
“I didn’t give up on it,” she said. “I just kept emailing them, but no one will ever call back. All you can do is email, and they just stopped responding.”
One of the products Flipcause promoted was a donation platform specifically designed for fiscal sponsors, organizations that fundraise on behalf of other, smaller organizations. Lisa Dugdale, executive director of Madison-based Center for Community Stewardship (C4CS), said Flipcause was great to work with, until it wasn’t.
“They had amazing customer service, and they had a they had very specific product for fiscal sponsors, (which) nobody else had,” Dugdale said.
“This is an unacceptable breach of trust,” C4CS Operations Director Stuart Hee said in a press release. “Our organizations raised funds in good faith. The harm we are now experiencing is the direct result of Flipcause’s mismanagement and executive greed.”
Oakland Voices reported that the company paid its executives more than $3 million in the year leading up to the bankruptcy filing.
Dugdale said 26 of its fiscally sponsored organizations are owed a total of more than $65,000.
C4CS has launched a donation drive — using a different online donation platform — for an emergency recovery fund to try and recoup the losses.
“We trust our organizations,” Dugdale said. “We have a good working relationship. We have an amazing community built. We will work with them to figure this out.”
The Wisconsin Department of Justice did not respond to a message asking whether it was investigating Flipcause.
