Oakland-based Flipcause has appealed an order from the attorney general demanding the company shutdown after nonprofits complained that it withheld funds from charities.
The appeal was filed Dec. 12, the day Flipcause had been given to cease operations and place its assets in control of the state. Flipcause challenged the order and denied it was “charitable fundraising platform” and subject to regulation under the California attorney general’s office.
Flipcause claims it is just a payment processor
The 6-page appeal argues that Flipcause is “payment processing platform framework” and therefore is exempt, because the company does not “permit charitable organizations to … market to donors, request funds from donors, or otherwise contact donors.”
“Flipcause’s payment processing platform serves as a gateway through which the charitable organizations then receive, hold, control, or distribute donations,” Flipcause wrote. “Flipcause does not solicit donations or provide a mechanism for charitable organizations to solicit donations through their platform.”
However, those services are promoted on Flipcause’s website.
Flipcause’s website proclaims it is the “best fundraising platform for small nonprofits.”
The website describes “custom branded donation and campaign pages,” “fundraising event pages,” and “custom crowdfunding campaigns.”
To reach donors, Flipcause allows “text-to-give” campaigns and “peer-to-peer fundraising” enabling “individuals to create their own personal fundraising requests that can be shared directly to their networks.” Marketing tools include “social sharing and activity feed,” “campaign progress updates,” and “fundraising progress and leaderboards.”
Flipcause also offers “donor and contact profiles with all engagement history in one place,” as part of its donor relationship management, “activity tracker,” according to its website.
Customer testimonial also highlight how useful the Flipcause platform was to small nonprofits. One praised Flipcause because they could fundraise, record donor information, and create a website. Another called Flipcause “customizable for programs, donations, fundraisers, and volunteers.”
Ponist Law Group is representing Flipcause. Attorney Sean Ponist did not return a phone call. Attorney Cary D. Mc Reynolds signed the appeal on behalf of the Flipcause. Neither responded to an email from Oakland Voices to clarify how the company is solely a payment processor but hasn’t processed donations for dozens of organizations.
Testing California’s fundraising platform regulations
The attorney general’s shutdown order is the first major enforcement action under AB 488, the 2021 law that sought to regulate online donation platforms. The law defines “charitable fundraising platforms” as entities that “perform, permit, or otherwise enable acts of solicitation to occur.” The law exempts vendors that only provide technical services like payment processing.
In its appeal, Flipcause’s lawyers claim the company solely provides technical services.
The company claims the law defining charitable fundraising platforms is “unconstitutionally vague.” Flipcause was “exercising [its] best business judgment,” in terms of the definition of a charitable fundraising platform.
Flipcause also claims that the attorney general knew about their platform, but waited six years to act. In 2019, the attorney general notified Flipcause it would need to register as a fundraising platform.
AB 488 took effect in 2024.
The Nov. 12 cease and desist order fined Flipcause $70,000, which includes not being registered for two years. Flipcause said it deserved notice before being penalized unfairly by the delay.
The attorney general has contacted other unregistered fundraisers and platforms.
Fundraising platform Gofundme received two notices to registered in 2018–before AB 488. Gofundme registered in 2024, renewed in 2025, and also submitted an annual report.
Four out of five charitable fundraising platforms have registered with the state’s Registry of Charities and Fundraisers.
California demanded Flipcause shutdown
The Nov. 12 order followed 31 organizations complaining to the attorney general that Flipcause was withholding more than $500,000 in donations. The order demanded Flipcause stop operations immediately and provide an accounting and list of users dating back to 2015. The order demanded Flipcause transfer all its assets to a blocked bank account by Dec. 12. The attorney general also assessed fines for not registering as a charitable donation platform, not filing annual reports, operating while not being registered, and not transferring donations to nonprofits within five business days.
Flipcause generally denied all allegations in its appeal and request or a hearing. In addition to vacating the order, they seek reimbursement of legal fees.
Ponist Law Group is representing Flipcause. Attorney Sean Ponist did not return a phone call. Attorney Cary D. Mc Reynolds signed the appeal on behalf of the Flipcause. Neither responded to an email from Oakland Voices to clarify how the company is solely a payment processor but hasn’t processed donations for dozens of organizations.
The attorney general may now vacate the order, schedule a hearing, or refer the case to a superior court. Flipcause requested a “full evidentiary hearing” with discovery if the order isn’t vacated. A date has not been set for a hearing.
The attorney general’s office has not responded to emails from Oakland Voices nor a Public Records Act request.
How we got here
To date, over 100 organizations have reported that Flipcause is withholding donations. Nonprofits have told Oakland Voices that Flipcause is withholding over $2 million dollars from them. On Oct. 8, the Better Business Bureau issued a warning to nonprofits following a pattern of complaints about delayed fund transfers. On Oct. 21, the Latino Medical Student Association-Northeast sued Flipcause in federal court. Twenty-nine organizations from 18 states are suing Flipcause, its CEO Sean Wheeler, and co-founder Emerson Ravyn for fraud. A judge is scheduled to hear arguments on Dec. 19 on whether or not to issue a preliminary injunction against Flipcause.
After Oakland Voices reported Flipcause was not registered as a fundraising platform, the attorney general issued the cease and desist order on Nov. 12.
On Dec. 6, Flipcause’s payment processor Stripe informed the company it would no longer process payments for the company.
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