Software4Nonprofits Emerges as Sole Bidder for Flipcause
According to bankruptcy filings, Software4Nonprofits (S4NP) was the only company to submit a bid for Flipcause. The sale price was approximately $400,000, significantly lower than the $15 million valuation Flipcause co-founder Emerson Ravyn reported in bankruptcy documents.
Nonprofits Face Uncertain Recovery
Oakland-based Mu’eed, Inc. is among more than 3,260 nonprofit organizations that relied on Flipcause to process donations. Amelah El-Amin, executive director of the Eating Rights Project, said many nonprofits are unlikely to recover the funds still owed to them.
“What is owed far exceeds $400,000,” El-Amin said. “A whole lot of people aren’t going to get money.”
Although Flipcause still owes the Eating Rights Project roughly $2,000, El-Amin considers her organization fortunate. Last year, Flipcause owed the nonprofit nearly $50,000, but most of those funds were finally transferred in the fall.
“By the grace of the Lord, we got all but $2,000,” she said. “We didn’t have a place for our donors, so we moved to LaunchGood to maximize this month of giving during Ramadan.”
Trustee Supports Sale
An independent trustee, Jeffrey Testa, was appointed by the bankruptcy court in January to oversee Flipcause’s case. In a March 2 letter to customers, Testa said he was “pleased” with the purchase agreement and expressed hope that Flipcause customers would transition to Software4Nonprofits.
Because there was only one bidder, a planned March 3 auction was canceled. Testa’s letter did not provide details about how much nonprofits might recover or what specific steps would follow the sale. However, he encouraged customers to submit Proof of Claim forms through the Flipcause bankruptcy website.
As of March 9, 266 nonprofits had filed claims.
How Bankruptcy Payments Will Be Distributed
Under bankruptcy law, assets are distributed according to a priority system. Administrative expenses and professional fees are paid before creditors. Nonprofits that used Flipcause to collect donations are classified as unsecured creditors, placing them near the end of the payment line.
Several expenses must be paid before any remaining funds can be distributed, including:
- $21,283 in continuing contracts approved by Testa, including:
- $17,845.50 for web hosting services with Weebly
- $3,437.50 for Numeracle’s IT and phone services
- A minimum $200,000 fee for SC&H, Inc., the investment bank that managed the sale
- Compensation for Testa, his legal counsel, and fees owed to the U.S. Trustee
- A $600,000 debt owed to Grand Avenue Investments, a secured creditor
In addition, the court-appointed Creditors’ Committee retained two law firms whose fees will be paid from the bankruptcy estate, further reducing the amount potentially available to nonprofits.
Given these obligations, it remains unclear whether nonprofit organizations will recover any meaningful portion of the funds they are owed.
About the Buyer
Software4Nonprofits is a donor management software provider founded in Canada in 1998 by Dan Cooperstock. The company initially offered its software free of charge before transitioning to a paid model in 2007.
In 2022, Cooperstock sold the business to Scott Rassatt and Danny Vivier, co-founders of Evermore Ventures.
The company serves more than 8,500 churches and nonprofit organizations and counts major organizations such as Habitat for Humanity, Hope International, and Big Brothers Big Sisters of America among its clients.
Rassatt and Vivier did not respond to questions regarding their reasons for acquiring Flipcause or their plans for current customers. However, Rassatt stated in an email that the company was working to understand the situation and assist affected nonprofits.
“We’re learning more about the situation and how we can best help the nonprofits as quickly as possible,” he said. “We feel deeply for the nonprofits that continue to be put through severe hardship.”
Court Proceedings
Parties wishing to challenge the sale were required to file objections by March 10. One organization, Queen Anne Helpline, a Washington-based nonprofit focused on homelessness prevention, submitted an objection on February 3.
On March 18, Judge Thomas Horan approved the sale of Flipcause and canceled a hearing that had been scheduled for March 19.
Editor’s Note: Amelah El-Amin is a graduate of Oakland Voices’ 2019 reporting program. This article was updated on March 12 to include comments from Jeffrey Testa and Scott Rassatt, and updated again on March 18 following court approval of the sale.