The Fundraising platform FlipCause filed for Chapter 11 bankruptcy in December, according to court documents. But the Oakland-based company owes more than $29 million to charities nationwide, including two in Idaho.
Allison Terenzio-Moody is the executive director of the Treasure Valley Children’s Theater. They put on productions for youth in the Boise Area like High School Musical Jr., and the Legend of Sleepy Hollow.
Before the company went bankrupt, she used FlipCause to take donations, sell tickets to performances and manage classes. The company owes her organization about $20,000, and she’s not sure she’ll ever see it.
“Basically, they took money away from our kids, and they took money away from our donors,” she said.
In November, California Attorney General Rob Bonta sent a cease and desist order to Flipcause to stop all operations, including taking charitable donations.
“Donors placed their trust in Flipcause to ensure their contributions reached those in need. Instead, charities are experiencing significant financial stress due to the platform holding these funds back. This is simply unacceptable,” said Attorney General Bonta in a statement on the California Department of Justice website.
”I’ve basically been told that, that money’s gone. You’re not going to see it, so you need to move on,” Terenzio-Moody said.
Despite switching to a new app and fundraising in December and January, Terenzio-Moody said the nonprofit is still operating in the negative.
“I want to make sure people know that we aren’t going anywhere,” Terenzio-Moody said. “We are so in love with what we do and the community that we create for young people. Our education programs and our productions are going to continue, but we need some help.”
Most of her efforts are focused on fundraising to recoup the lost costs, and Terenzio-Moody said that’s taken the focus away from the organization’s education programs.
Up in Hayden, Ds Connections – a nonprofit that helps people with Down Syndrome – also lost around $20,000 from FlipCause. But they’ve had better luck in turning things around.
Susan Villelli, founder and board president at the nonprofit, said the organization was able to raise all the lost funding and more after an Idaho Gives campaign, and the support of the local North Idaho community.
“We have not lost any programs, or canceled anything due to the FlipCause case, and because our budget is now back to its original design for 2025, it’s full steam ahead with everything as planned, including new projects,” she said.
There is a new wrinkle in the bankruptcy case which could allow these nonprofits to recoup some of their losses after all. Last month, Jeffrey T. Testa, the trustee for FlipCause, asked a Delaware court to convert the case to Chapter 7 bankruptcy, and the motion was granted.
“The trustee has been given the authority to try to claw back some of that money for the nonprofits,” Heidi K. Abegg, a lawyer in Washington D.C. who has clients who are owed money by FlipCause.
Terenzio-Moody said she plans to look into her legal options in light of the new developments, and Villelli said her nonprofit is going to fight for whatever funding they can recapture through the legal system.
