April 2026  

Flipcause, a for-profit fundraising platform that promised much lower processing fees (1.5%) than other similar companies, filed for bankruptcy at the end of 2025, revealing it owed $30 million to creditors, including $29 million in charitable funds to over 3,200 nonprofit organizations nationwide, but did not have the cash on hand to make good on its commitments. Bankruptcy filings listed $20.2 million in assets — $15 million of which was the Flipcause website and platform — and just $70,000 in cash.  It was also revealed that Flipcause executives paid themselves $3.8 million over several years prior to filing for bankruptcy. 

In this update: 

  • Timeline of Events
  • Bad news for nonprofits
  • What should burned nonprofits do?
  • Impact on Pennsylvania nonprofits
  • What can be done to prevent this from happening in the future?
Timeline of Events   
  • November 11, 2025: The Latino Medical Student Association-Northeast (LMSA-NE) and 28 other nonprofit organizations across the country filed an amended complaint in a federal lawsuit against Flipcause, alleging that Flipcause and its executives ran a “nationwide scheme … to defraud and systematically deprive non-profit organizations of the very funds they raised for their charitable missions.”
  • December 19, 2025: Flipcause filed for Chapter 11 bankruptcy (the type that allows for reorganization and continued operations while debts are managed and some portion of money owed is paid out over time to creditors under court supervision).
    • Nonprofits were permitted to file claims in Bankruptcy Court to recover unpaid charitable funds through the bankruptcy proceeding.
  • January 28, 2026: Bankruptcy Court approved the formation of an unsecured creditor’s committee, which includes 4 of the 20 nonprofits owed the most.
  • March 18, 2026: As part of the bankruptcy proceedings, Software4Nonprofits purchased Flipcause for $400,000, or about 3% of the $15 million Flipcause’s co-founder Emerson Ravyn said a sale would bring.
    • Software4Nonprofits reinstated all of the platform’s features and campaigns as the DONATION Pro plan under its own branding. A letter from the CEO of Software4Nonprofits detailing what this means for Flipcause customers can be accessed by clicking the following link, CEO Letter to Flipcause Customers.
  • April 28, 2026: Bankruptcy judge converted the Flipcause Chapter 11 reorganization case to a Chapter 7 liquidation case, which means that:
    • Nonprofits with unpaid charitable funds will no longer be able to file claims through the Bankruptcy Court.  
Bad news for nonprofits

The Bankruptcy Court focus has turned to liquidation of assets in an attempt to repay the $30 million Flipcause owes to creditors, the majority of whom are nonprofit organizations that are considered “unsecured” creditors under the bankruptcy. This means nonprofits will only receive payment after claims from secured creditors, such as the bankruptcy attorneys and trustees and Flipcause investors, are settled.  Even if the Chapter 7 trustee manages to “claw back” some portion of the $3.5 million Flipcause paid to its founders prior to filing for bankruptcy, it is unlikely that the nonprofits owed thousands of dollars in donated funds meant to support their charitable missions will receive repayment of any kind.   

What should burned nonprofits do?

Nonprofits affected by the Flipcause collapse should download or take screenshots of remaining Flipcause balances and correspondence for any consumer complaints, future audits, or regulatory inquiries, and download all donor, transaction, and payout records to help preserve historical information. It may also be helpful to work with an attorney who can help you stay informed about the Chapter 7 liquidation process. Eisenberg & Baum, LLP, the firm leading the class-action lawsuit on behalf of dozens of organizations, would be a good place to start. 

For more details, see this series of articles authored by Rasheed Shabazz published in the Oakland Voices, which broke the story on September 11, 2025 and the Nonprofit Quarterly article “Nonprofits in Limbo as Flipcause Bankruptcy Unfolds” (dated March 13, 2026), which have helped raise national awareness about this situation.  

Impact on Pennsylvania nonprofits

In Pennsylvania alone, according to information gleaned from the bankruptcy filings and compiled by Shabazz, 134 organizations are owed a total of $956,410.81. Affected organizations are located throughout Pennsylvania (Harrisburg, Lancaster, York, Reading, Philadelphia, Pittsburgh, Paradise, etc.) and the amounts due to most of these nonprofits are in the thousands of dollars. Over 25 organizations are owed amounts over ten thousand dollars (and many more than a few of those are owed amounts in the tens of thousands of dollars, with an organization in Pittsburgh owed over $108,000).   

One Pennsylvania organization, which is owed about $50,000, reports that this amount is more than half of its total assets. The organization is a small nonprofit that provides grief counseling to parents who have lost babies to SIDS, which the founder started after losing her own child. She now believes the organization will have to dissolve. 

What can be done to prevent this from happening in the future? 

The impact of these losses is truly significant and calls for more oversight of and accountability for fundraising platforms.  Charities can help the situation by staying vigilant and by advocating for additional regulatory enforcement.  Here are a few tips:  

  • Do your due diligence prior to choosing a fundraising platform – check reviews and ratings and speak with other nonprofits who use the platform. 
  • Always sign a contract with the platform and obtain legal review before doing so.  
  • Choose a platform that deposits donations directly into your account.  
  • Insist on the ability to view your customer portal/account at any time and monitor platform activity regularly. 
  • If the fundraising platform will solicit contributions on your organization’s behalf, confirm that it is registered as a “professional solicitor” in Pennsylvania.   
  • Professional solicitors are required to register in Pennsylvania with the Bureau of Corporations and Charitable Organizations (BCCO) prior to soliciting for charitable organizations in Pennsylvania.  Search the Pennsylvania Department of State Charities Search database to confirm registration (this is the same database that lists charities registered to solicit charitable funds in Pennsylvania); click on the drop-down arrow on the left under the word ‘Category’ to search for professional solicitors and professional fundraising counsel).   
  • Immediately report any unregistered fundraising platforms that should be registered as professional solicitors to the BCCO, and any concerns about the activities and/or business practices of fundraising platforms to the Pennsylvania Attorney General.  
  • Stay on the lookout for red flags, such as delayed payments or restricted access to your portal/account.  
  • Advocate for broader registration of fundraising platforms and let your state congressional representatives know of your concerns. Like many other jurisdictions, Pennsylvania already has a law governing charitable solicitations and fundraising entities, but it does not explicitly require registration of fundraising platforms.  California and Hawaii are currently the only states that require this registration.   
  • Encourage the Pennsylvania Attorney General and the BCCO to include more easily accessible information on their websites regarding oversight and registration of professional solicitors and best practices for fundraising platforms.