Flipcause: Nonprofit Fundraising Platform Collapses After Stripe Freezes $2.2 Million

Flipcause, Inc., an Oakland-based nonprofit fundraising platform that had processed over $1 billion in aggregate donation volume since its 2012 founding, filed for chapter 11 bankruptcy protection on December 19, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The filing came 15 days after Stripe—the company's sole payment processor—terminated services and froze approximately $2.2 million in funds, leaving Flipcause with roughly $70,000 in operating cash. The filing followed a November 14 cease-and-desist order from California Attorney General Rob Bonta, who cited Flipcause for failing to register as a charitable fundraising platform under the state's first-in-the-nation AB 488 regulatory framework governing online charitable solicitation.

The case reflects the risks that fintech companies face from payment processor dependency and the regulatory frameworks targeting charitable fundraising platforms. With 29 nonprofit organizations from 18 states suing Flipcause for fraud and seeking at least $5 million in damages, the bankruptcy proceeding will address the disposition of funds that nonprofits say belong to their charitable missions—not to Flipcause's creditors.

Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-12246
Judge	Thomas M. Horan
Petition Date	December 19, 2025
Debtor(s)	Flipcause, Inc.
Headquarters	Oakland, California
Founded	2012
Total Funding Raised	$4.54 million
2024 Processing Volume	$91.7 million
Aggregate Processing Volume	$1+ billion
Organizations Served	10,000+
Employees	6 full-time; 5 contractors
Stated Liabilities	$30.5 million
Operating Cash (at filing)	~$70,000
Stripe Frozen Funds	~$2.2 million
Secured Debt	~$1.225 million
Lead Counsel	Greenberg Shmerelson Weinroth & Miller LLP
Investment Banker	SC&H Group, Inc.
Claims Agent	Epiq Corporate Restructuring, LLC

Company Origins and Growth

Flipcause was originally founded as Wecause Group in San Francisco in 2012, later rebranding and relocating to Oakland's Jack London Square neighborhood in 2013 or 2014. Co-founder Emerson Ravyn served as CEO through approximately June 2021, with Sean Wheeler assuming the role by March 2025 according to California Secretary of State filings. The company positioned itself as an affordable, all-in-one solution for small nonprofits that couldn't justify multiple enterprise-level software subscriptions.

The platform integrated several functions that smaller organizations typically cobbled together from various vendors: customizable donation pages that could be embedded on nonprofit websites, payment processing through Stripe integration, donor management and event registration tools, and communication features for engaging supporters.

Flipcause's growth earned the company a spot on the 2019 Inc. 5000 list of fastest-growing private companies in America, ranking No. 233 after posting 1,792 percent revenue growth over a three-year period. The company reported $4.7 million in revenue for 2018. Crunchbase records show Flipcause raised $4.54 million in total funding, including a $2.828 million seed round in October 2018 from investors including Avion Technology and Comeback Capital.

By 2024, the platform was processing $91.7 million in annual donation volume, and the company's stated liabilities at filing reached $30.5 million.

California AB 488: First-of-Its-Kind Platform Regulation

The regulatory framework began taking shape in October 2021, when California enacted Assembly Bill 488—the nation's first statute specifically governing online charitable fundraising platforms. The law, which became purportedly effective January 1, 2023, created a registration requirement for any entity that uses the internet to provide a website, service, or platform to persons in California and performs, permits, or otherwise enables acts of solicitation for charitable purposes.

The regulatory framework classified platform activities into five solicitation types with varying requirements. Platforms were required to register with the Attorney General's Registry of Charities and Fundraisers, file annual reports, and distribute donations to recipient organizations no later than 30 days after the end of the month in which the donation was made. The Attorney General was empowered to issue cease-and-desist orders, revoke registrations, or pursue civil action against non-compliant platforms.

As of November 30, 2025, the California AG Registry listed 274 registered charitable fundraising platforms, but nearly one in five platforms operating in California had not complied with registration requirements. The list of non-compliant platforms included Indiegogo, OneCause, Qgiv, iDonate, Snap! Mobile, and Donorbox.

The Regulatory and Payment Processor Cascade

Nonprofit Complaints Surface

Problems for Flipcause began surfacing publicly in September 2025, when the East Oakland Collective reported that the platform was withholding more than $127,000 in donations. Candice Elder, the organization's executive director, described the situation as "a constant fight to get the money," noting that Flipcause's delays made it hard to "make payroll, keep the lights on, buy food, (and) feed the unhoused." When Elder made her frustrations public, CEO Sean Wheeler promised to expedite a pending transfer of $34,185 and credit the organization with a one-year subscription.

By October 2025, Oakland Voices reported that over 100 organizations had come forward claiming Flipcause was withholding donations, with total withheld funds estimated at $1.5 to $2 million. The Better Business Bureau issued an "F" rating for Flipcause in August 2025, citing a pattern of complaints, delayed funds, and lack of responsiveness.

November 14: Attorney General Cease-and-Desist

On November 14, 2025, California Attorney General Rob Bonta issued a cease-and-desist order demanding Flipcause immediately halt all operations related to charitable solicitations in California. The order cited the company's failure to register as a donation platform and failure to submit annual reports for two years. The AG assessed $70,000 in penalties and identified 17 specific organizations owed $615,242.57 in withheld donations.

For community groups already dealing with budget constraints, Flipcause payout delays led to missed payrolls, staff layoffs, canceled programs, and rising anxiety during the year-end giving season.

December 4: Stripe Terminates Services

On December 4, 2025, Stripe—Flipcause's sole payment processor—terminated services with what the company characterized as minimal notice. Stripe placed a 100 percent hold on Flipcause's credit reserves and froze the merchant account, immobilizing approximately $2.2 million in funds.

The Stripe termination eliminated Flipcause's ability to process donations, generate revenue, or provide services to nonprofit clients. The company depended on a single payment processor and had limited operating cash.

Understanding why payment processors like Stripe maintain reserves—and why they might freeze them—requires context about industry risk management. Stripe's documentation explains that rolling reserves are temporary holds on a portion of a business's funds, typically ranging from 5-10 percent of transaction volume held for 30-180 days. These reserves protect against chargebacks, fraud, and financial liabilities. Stripe categorizes businesses into risk tiers using automated assessments, and regulatory enforcement actions can affect those assessments.

Federal Fraud Lawsuit

Even before the bankruptcy filing, 29 nonprofit organizations from 18 states had moved to protect their interests through litigation. On December 5, 2025, the organizations filed an amended complaint in U.S. District Court for the Central District of California, alleging that Flipcause ran a "nationwide scheme to defraud and systematically deprive non-profit organizations of the very funds they raised for their charitable missions."

The lawsuit, represented by Eisenberg & Baum LLP, characterized the withheld funds as belonging to the nonprofits' charitable missions and suggested the total number of affected organizations could reach "tens of thousands."

Flipcause's Defense: The Payment Processor Argument

Flipcause has not conceded the regulatory violations. The company filed an appeal of the California AG order on December 12, 2025—the day it was given to cease operations—arguing that it operates as a payment processor rather than a traditional fundraising platform. If Flipcause is classified as a payment processor rather than a charitable fundraising platform, it might not be subject to AB 488's registration requirements.

The argument has implications for the fintech industry. Many technology platforms that facilitate charitable donations occupy gray areas in the regulatory landscape, and how California courts classify Flipcause could influence compliance requirements for similar companies nationwide. Hawaii has already enacted similar legislation—Act 205 in 2024.

Section 363 Sale Process

With only approximately $70,000 in operating cash and over $2.2 million frozen at Stripe, Flipcause entered bankruptcy with limited liquidity. The company is pursuing an expedited Section 363 sale process.

Bidding Procedures

Flipcause filed a bidding procedures motion on December 19, 2025, seeking expedited approval to market and sell substantially all of the company's assets. Management has valued the assets at approximately $16 million, reflecting the platform's historical processing volume and nonprofit client base.

Flipcause filed without a stalking horse bidder. Companies pursuing 363 sales often identify a floor bid before entering bankruptcy to establish value and signal interest. The company retained SC&H Group, Inc. as investment banker on December 3, 2025—two weeks before the bankruptcy filing—to market the assets. The engagement terms include a $30,000 monthly fee (advance, nonrefundable) and a minimum transaction fee of $500,000.

Potential Acquirer Considerations

For potential acquirers, the Flipcause platform includes a client base of over 10,000 nonprofit organizations and $91.7 million in donation volume in 2024 alone. The nonprofit software market is growing.

The sale process includes regulatory questions surrounding AB 488 compliance and payment processing relationships, either by negotiating with Stripe or integrating alternative processors. The nonprofit complaints and the ongoing federal lawsuit would be addressed through the 363 sale's "free and clear" provisions. The $16 million management valuation reflects the platform's client base and technology, and acquirer views will emerge during the bidding process.

First Day Relief and the Stripe Dispute

Motion to Compel Stripe

A first day motion seeks to compel Stripe to immediately release approximately $2.2 million in frozen funds and resume payment processing services.

Approximately $109,001.14 of the frozen funds represents pass-through donations that belong to nonprofit clients rather than to Flipcause itself. These funds were in transit to charitable organizations when Stripe froze the accounts. Whether these funds should be treated as trust assets or general estate property will affect how nonprofits fare in the bankruptcy distribution.

The resolution of the Stripe dispute will affect any sale process.

Stripe has filed a Notice of Appearance in the bankruptcy case and reserved its rights, indicating this will be a contested dispute. The payment processor's concerns extend beyond the regulatory issues that triggered the initial fund freeze, including chargebacks, fraud claims, and potential liability to nonprofit clients.

On December 29, 2025, Stripe filed a formal objection (Dkt. 26) to the Debtor's Motion to Compel, contesting the release of the frozen funds and resumption of payment processing.

Other First Day Motions

The California Attorney General's office has also filed a pro hac vice motion, indicating it intends to participate in the bankruptcy proceedings.

Critical Development: Motion for Chapter 11 Trustee

On January 5, 2026, the California Attorney General's Office filed a Motion for Appointment of a Chapter 11 Trustee (Dkt. 40) pursuant to 11 U.S.C. § 1104(a). The motion contains serious allegations against Flipcause and its management.

AG Allegations

The motion alleges gross mismanagement under § 1104(a)(1) and argues trustee appointment is in the best interests of creditors, equity security holders, and other interests of the estate under § 1104(a)(2). The California AG asserts that CEO Emerson Ravyn lacks the qualifications to lead the company through bankruptcy.

Multi-State Attorney General Involvement

The case now involves multiple state attorneys general. The North Dakota Attorney General filed a Notice of Appearance on January 2, 2026 (Dkt. 37), signaling additional states may participate given Flipcause's nationwide nonprofit client base. The North Dakota AG's involvement reflects the geographic reach of Flipcause's platform and the potential for coordinated enforcement by multiple state regulators.

Key Deadline: Objections to the Trustee Motion are due January 12, 2026.

Industry Context: Nonprofit Technology and Payment Processing Risk

The Nonprofit Software Market

Flipcause operated in a growing market for nonprofit technology solutions. According to Mordor Intelligence, the nonprofit software market reached $4.59 billion in 2025 and is projected to grow at a 7.98 percent compound annual rate to reach $6.74 billion by 2030. Subscription-based SaaS models captured 79.65 percent of 2024 billings, with fundraising and donation management representing 36.85 percent of market share.

Despite their increasing reliance on technology platforms, nonprofit organizations typically invest minimally in technology—often less than 3 percent of their budgets. Only 13 percent invest more than 5 percent on technology. This underinvestment limits organizations' ability to perform due diligence on platform stability and regulatory compliance.

Payment Processor Dependency

The Flipcause case shows the concentrated risk that fintech companies face when relying on a single payment processor. Stripe's decision to terminate services and freeze 100 percent of reserves—rather than maintaining normal reserve levels—shows that payment processors can halt a business's transaction flow when regulatory or reputational concerns arise.

For platforms serving the nonprofit sector, charitable donations pass through platforms before reaching their intended recipients, creating obligations that complicate disputes with payment processors. When Stripe froze Flipcause's accounts, company funds and donor funds became inaccessible.

Integrating multiple processors requires engineering resources and creates operational complexity.

Year-End Giving Season Impact

The timing of Flipcause's shutdown affected nonprofit clients during year-end giving. Year-end giving represents a disproportionate share of annual charitable donations, with the period between Thanksgiving and December 31 accounting for roughly one-third of all annual giving for many organizations. November and December are when many nonprofits conduct fundraising campaigns, secure major gifts, and build momentum for the following year.

For organizations dependent on Flipcause's platform, the shutdown disrupted operations during the busiest giving season. Without functioning donation pages, payment processing, or access to donor management tools, affected nonprofits sought alternative fundraising channels. Some organizations reported being unable to process year-end gifts at all.

Competitor Response

Givebutter, a competing fundraising platform, launched a $1 million relief fund offering $500 to each 501(c) nonprofit that had been a Flipcause customer in the past 12 months, with up to 2,000 organizations eligible. CEO Max Friedman said: "With Giving Tuesday and year-end giving season right around the corner, this disruption could not be happening at a worse time for nonprofits." Partners Wix and Squarespace offered discounted premium website subscriptions to help affected organizations transition.

What Nonprofits Should Know

The California Attorney General's office has issued guidance for nonprofit organizations whose funds are being held by Flipcause. Affected organizations were instructed to file complaints with the AG's office or other state attorneys general, as enforcement actions may vary by jurisdiction.

The AG's guidance also noted recovery prospects: unsecured creditors typically receive only a fraction of what is owed in bankruptcy proceedings. Whether nonprofit claims for pass-through donations will receive priority treatment as trust funds or be treated as general unsecured claims will affect recovery rates.

Trust Fund Arguments

The approximately $109,000 in pass-through donations held at Stripe raises legal questions about fund characterization. Nonprofits may argue that donations intended for charitable purposes were never Flipcause's property—rather, Flipcause held these funds in trust pending distribution to their rightful owners. If courts accept this characterization, nonprofit claims could receive priority over general unsecured creditors.

The analysis is complicated by how Flipcause commingled funds in its accounts. If donation proceeds were mixed with Flipcause's operating revenues in a single account without clear segregation, tracing specific donations to specific nonprofits becomes difficult. The resolution of these issues will depend on detailed accounting analysis and the court's willingness to impose constructive trust remedies.

Due Diligence Lessons

From a due diligence perspective, the Flipcause case highlights considerations for donors and nonprofits when selecting fundraising platforms. Key considerations include:

• Regulatory compliance: Verify that platforms are registered with state attorney general offices in jurisdictions where they operate
• Fund transfer timelines: Understand how quickly donations are transferred and what reserves platforms maintain
• Financial stability: Evaluate platform longevity, funding status, and operational scale
• Alternative channels: Maintain backup donation methods to ensure continuity if a platform fails
• Contract review: Understand termination provisions, fund handling procedures, and liability limitations in platform agreements

For nonprofits currently using donation platforms, periodic review of platform relationships and fundraising channels can reduce reliance on a single provider. Organizations that relied exclusively on Flipcause lacked alternatives when the platform failed.

Case Timeline and Key Deadlines

Frequently Asked Questions

What is Flipcause?

Flipcause is an Oakland-based nonprofit fundraising platform founded in 2012 that provides subscription-based SaaS tools including donation pages, payment processing, donor management, and event registration. The company processed over $1 billion in aggregate donation volume and served more than 10,000 nonprofit organizations before filing for bankruptcy.

Why did Flipcause file for bankruptcy?

Flipcause filed after Stripe—its sole payment processor—terminated services on December 4, 2025, and froze approximately $2.2 million in funds, leaving the company with only about $70,000 in operating cash. The Stripe termination followed a California Attorney General cease-and-desist order issued on November 14, 2025, demanding Flipcause halt operations for failing to register as a charitable fundraising platform under California's AB 488 law.

What happens to nonprofit donations held by Flipcause?

Approximately $109,000 in nonprofit client funds (pass-through donations) were frozen in Stripe's accounts at filing, in addition to over $1 million in Flipcause's own operating funds. Recovery depends on the court's ruling on Flipcause's motion to compel Stripe to release funds and whether nonprofit claims are treated as trust funds or general unsecured claims. The California AG has warned that unsecured creditors typically receive only a fraction of what is owed in bankruptcy.

What is California AB 488?

Assembly Bill 488 is California's first-in-the-nation law regulating online charitable fundraising platforms, which became effective January 1, 2023. The law requires platforms to register with the Attorney General, distribute donations within 30 days of month-end, and file annual reports. The Attorney General can issue cease-and-desist orders and pursue civil action against non-compliant platforms. Hawaii has enacted similar legislation.

How many nonprofits are affected?

The federal lawsuit filed by 29 organizations estimated "tens of thousands" of affected organizations. Flipcause served over 10,000 organizations during its operation. Oakland Voices reported that over 100 organizations had come forward claiming withheld donations totaling at least $1.5 to $2 million before the bankruptcy filing.

What is the federal lawsuit against Flipcause?

Twenty-nine nonprofit organizations from 18 states, led by the Latino Medical Student Association-Northeast, filed an amended complaint in December 2025 alleging Flipcause ran a "nationwide scheme to defraud" nonprofits of their raised funds. The lawsuit, represented by Eisenberg & Baum LLP, seeks at least $5 million in damages and characterizes the named plaintiffs' claims at $782,992.

What is Flipcause's defense?

Flipcause appealed the California AG order, arguing it operates as a payment processor rather than a traditional fundraising platform. This classification could exempt it from AB 488 registration requirements. The distinction could affect how similar fintech companies are regulated across the charitable giving industry.

Can nonprofits recover their funds?

Recovery depends on multiple factors: resolution of the Stripe dispute over frozen funds, outcome of the 363 sale process, and priority of nonprofit claims as potential trust funds versus general unsecured creditors. Competitor Givebutter launched a $1 million relief fund offering $500 per affected nonprofit to help organizations transition during the disruption.

What is the sale process timeline?

Flipcause filed a bidding procedures motion seeking expedited approval of a 363 sale, but specific bid deadlines, auction dates, and sale hearing dates have not yet been set. SC&H Group was retained as investment banker with a $500,000 minimum transaction fee.

What does this case mean for other fundraising platforms?

The Flipcause case shows regulatory and payment processor risks for fintech companies operating in the nonprofit space. California's enforcement action and Hawaii's similar legislation show expanding oversight of charitable fundraising platforms. Platforms that fail to register in states with registration requirements may face enforcement actions, and dependency on a single payment processor creates risk if that relationship is terminated.

Why is the California Attorney General seeking to appoint a Chapter 11 Trustee?

On January 5, 2026, the California AG filed a motion (Dkt. 40) alleging gross mismanagement by current management, including $29 million in missing charitable assets, approximately $3.83 million in payments to CEO Emerson Ravyn, his wife, and his brother's entity within 90 days before filing, and commingling of charitable funds with operating funds. The AG argues a trustee is needed to protect charitable assets and ensure proper administration of the estate. Objections are due January 12, 2026.

Has Stripe objected to releasing the frozen funds?

Yes. On December 29, 2025, Stripe filed an objection (Dkt. 26) to Flipcause's motion to compel the release of approximately $2.2 million in frozen funds and resumption of payment processing. The dispute remains contested.

Are other states involved in the case?

Yes. In addition to California's cease-and-desist order and motion for a Chapter 11 Trustee, the North Dakota Attorney General filed a Notice of Appearance on January 2, 2026 (Dkt. 37). Given Flipcause's nationwide nonprofit client base, additional states may enter appearances as the case progresses.

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