Flipcause not registered to collect donations in California, records show

State records show California’s attorney general knew as early as 2019 that the Oakland-based donation platform Flipcause wasn’t registered to do business in the state. 

The company, now at the center of a lawsuit and complaints that it is withholding funds donated to nonprofits through its platform, continues to operate unregistered as of Oct. 30.

Flipcause did not respond to questions from Oakland Voices about registration for charitable fundraising platforms.

Attorney General Rob Bonta: ‘Internet platforms … can come at a cost’

Last year, California began requiring professional fundraisers and fundraising platforms that collect donations to register with the state’s Registry of Charities and Fundraisers. 

Attorney General Rob Bonta heads the state Department of Justice. He represents the state and Californians. His office specifically monitors charities and fundraisers. 

In 2024, Bonta pledged to supervise donation platforms and “protect donors and charities, and ensure that donations are going toward their intended purposes.”

“There’s no denying that, in recent years, charitable giving has been increasingly taking place online,” Bonta said. “Internet platforms like GoFundMe, Meta, and PayPal all make it convenient for Californians to donate to or support their favorite charities, but that convenience can come at a cost.” 

Meanwhile the regulatory counsel for The Nonprofit Alliance said the attorney general can still act in this matter.

“The most efficient thing would be for the attorney general to take action and freeze their assets,” said Bob Tigner, the organization’s attorney.

The attorney general’s office has declined to comment on whether Flipcause is under investigation.

Nonprofits accuse Flipcause of withholding millions 

In September, Oakland Voices first reported dozens of nonprofits could not access donations raised through Flipcause. Since then, dozens of nonprofits have come forward about withheld funds. Earlier this month, the Better Business Bureau warned nonprofits about Flipcause. 

Coming to the Table, a national program of Restorative Justice for Oakland Youth (RJOY), told Oakland Voices that Flipcause is withholding more than $70,000 – roughly a third to half of its annual program budget.

“These delays have had very real consequences,” said Dr. Teiahsha Bankhead, executive director of RJOY. “They’ve restricted our ability to plan and deliver programming, including in-person trauma trainings scheduled for the next year that may be delayed.” 

The program, which is preparing for its 20th year, started using Flipcause in 2024. They’ve diverted staff time from programming to track the missing money. “Beyond the financial strain, this situation undermines the trust we’ve built with donors and community members,” Bankhead added. 

As recently as this week, Bankhead said that Flipcause is still collecting money from Coming to the Table’s monthly donors. Flipcause has never transferred donations raised through the platform, she said.

At least four organizations said they’ve filed complaints with California’s attorney general. Nonprofits also reported filing complaints with attorney generals in Massachusetts, Michigan, and Tennessee. 

A federal lawsuit filed last week alleged that Flipcause defrauded thousands of charities. The attorneys for the case seek plaintiffs for a potential class action lawsuit exceeding $5 million.

California’s regulation of donation platforms

In October 2019, California’s then-Attorney General Xavier Becerra notified Flipcause that it would have to register as a professional fundraiser to continue soliciting donations. 

In 2019, Assemblymember Jacqui Irwin (Sherman Oaks) and the Department of Justice started crafting rules for donation platforms. After AB 2280 stalled in 2020, their efforts resulted in AB 488, signed into law in 2021. While PayPal, Inc. supported the legislation, giving platform Classy, Inc. opposed. The law took effect in 2023, with registration rules enforced starting in 2024. 

As of Oct. 30, Flipcause remains unregistered, state records confirm. 

The attorney general’s office did not respond to a request to comment on Flipcause’s registration status.

In 2024, Bonta released an updated guide for charities and donation platforms. According to the attorney general, more than 109,000 charitable organizations registered as of 2024. As of June 2022, those organizations reported revenues exceeding $473 billion. 

Assemblymember Irwin told Oakland Voices she partnered with the attorney general’s office so nonprofits and donors could safely and securely raise funds through modern technologies. 

“I would encourage anyone who feels the law is not being followed to file a complaint with the Attorney General,” Irwin said. The 2021 legislation updated the law, including registration and distribution requirements, she said. 

Donation platform registration requirements

State law required donation platforms to register beginning June 12, 2024. Registration includes $625 for initial registration and for annual renewals. Companies must also submit annual reports. 

Unregistered platforms can incur fines of up to $1,000 per violation, plus $100 per day until issues are solved. 

The statute empowers the attorney general to issue cease and desist orders, revoke registrations, or pursue civil action. Borrowing or commingling funds–mixing funding from different sources–can trigger enforcement. 

The registry lists major donation tech platforms like GoFundMe and GiveButter. Additionally, Big tech firms like Apple, Google, Meta, and PayPal have registered. Retailers, restaurants, and rideshare companies with donation functions —ranging from Amazon and Popeye’s Louisiana Kitchen to Lyft and Uber—also appear on the list. 

Oakland Voices reviewed 10 additional charitable fundraising platforms included in the registry and found San Francisco-based Indiegogo unregistered. Other companies like Bonterra, Oakland-based common application JustFund.us and San Francisco-based Mazlo did not submit annual reports for 2024. Donorbox and Zeffy, which both run ads comparing their services to Flipcause, are neither listed in the registry nor on file with the Secretary of State.

GoFundMe, which bought Classy in 2022, recently created accounts for 1.4 million nonprofits on its platform without their consent. The company quickly issued an apology.

Attorney general’s advice: File a complaint 

To date, it is unclear how many complaints have been filed against Flipcause with the attorney general. Although the attorney general’s office has known since at least 2019 that Flipcause was not registered, it is not known if the office is using its new enforcement powers.

The attorney general’s website encourages people and organizations to file complaints their office, the Better Business Bureau, local police, and the IRS. 

The Federal Trade Commission also encourages and accepts reports of crowdfunding scams, but the Report Fraud webpage is currently unavailable due to the federal government shutdown.

Disclosure: Oakland Voices is a program of the Maynard Institute for Journalism Education and currently uses News Revenue Hub’s Fund Journalism platform to support our mission.