Attorney general issues guidance for nonprofits affected by Flipcause

California Attorney General Rob Bonta is advising nonprofits owed donations payments by Flipcause to download/screenshot and preserve all records.

On Dec. 23, Bonta instructed nonprofits whose donations weren’t directed to them by Oakland-based Flipcause to file a complaint with his office or other state attorney generals, and to communicate directly with donors.

California Attorney General Rob Bonta’s Guidance to Nonprofits Affected by Flipcause

Download/screenshot Flipcause records (balances, transactions, donors, correspondence)
File a consumer complaint with the attorney general of California or another state
Let donors know which platform to donate
Research potential fundraisers carefully

Flipcause filed for Chapter 11 bankruptcy on Dec. 19, listing more than 3,000 nonprofits across the country as unsecured creditors. Flipcause owes a total of $29 million to nonprofits, with the largest amount owed to a single organization being $1.2 million. Unsecured creditors typically only receive a fraction of what is owed them, if that.

“With comprehensive laws regulating charitable fundraising platforms, California is committed to protecting our nonprofit organizations and holding accountable those that try to turn a buck without delivering on their promises to our charities,” Bonta said in the release. “At the California Department of Justice, we will continue to uphold our laws that protect donors, ensure transparency, and uphold the integrity of charitable giving.”

Attorney general recommends researching platforms

Bonta issued a cease and desist order on Nov. 12 demanding Flipcause shutdown. Flipcause has appealed the order, arguing in part that it isn’t a “charitable fundraising platform” and doesn’t fall under attorney general’s authority.

The attorney general’s office is encouraging nonprofits to use the Registry of Charities and Fundraisers to “research fundraisers carefully.”

As Oakland Voices reported, nearly one in five donation platforms are unregistered. Many nonprofit leaders consider the Registry an outdated “disaster.”

The announcement does not provide guidance to nonprofits on how to recover funds during bankruptcy proceedings. Flipcause owes more than $29 million to over 3,000 nonprofits.