'They stole from us': Colorado charity cut off from $28K after donation platform files for bankruptcy

A food bank in Colorado learned that the hard way. St. George Episcopal Mission in Leadville says it lost access to nearly $28,000 in funds meant to help feed struggling families after the company handling its online donations filed for bankruptcy.

“We would once a month get a disbursement,” Melissa Earley, pastor in residence, told CBS News Colorado in a story published Feb. 24 (1). “Then we started noticing we were getting those disbursements more slowly and in smaller quantities.”

Stranded charity funds

St. George Episcopal Mission relied on California-based Flipcause, a third-party fundraising and payment processor, to online donations from supporters. These platforms are widely used by nonprofits because they make online giving easier. For the food bank, Flipcause helped keep its pantry full of canned goods and even fresh produce.

In December, Flipcause filed for bankruptcy with nearly $28,000 still earmarked for the Colorado nonprofit, and they weren’t alone. According to Oakland Voices, citing court documents, Flipcause owed $29 million to roughly 3,200 “unsecured creditors” — mostly nonprofits — across the country (2).

Furthermore, Oakland Voices reports that court documents show, in the year leading up to the bankruptcy filing and while nonprofits waited on donations, the company paid out over $3.8 million to executives, families and “a web of related entities” (3). Flipcause executive chairman Emerson Ravyn testified the payments were “bridge financing” in anticipation of a sale that never materialized, but Earley sees it differently.

“They stole from us,” she told CBS News Colorado. “They stole from people who are hungry. They stole from people who are unhoused, from immigrants, from kids’ sports teams.”

According to Oakland Voices, Flipcause is now set to be sold in bankruptcy court for $400,000 (4). It’s unclear how much, if anything, nonprofits that used the platform might be able to recover.

Protecting your money

It’s difficult to predict when a company might fail. Still, there are a few practical steps that can reduce the risk of money getting trapped if a platform collapses.

Move funds frequently: Whether it’s a donation platform, payment processor or marketplace account, transferring money to your own bank account regularly limits how much remains exposed.

Watch for payment delays: Late or partial payments can be an early warning sign that a company is struggling financially.

Research the platform’s structure: Some services hold funds in segregated accounts, which may offer more protection if the company runs into trouble.

Understand dispute options: Credit cards sometimes provide stronger consumer protections than debit transactions if funds are mishandled.