CityLax has ended its relationship with Flipcause

Dear Friends and Supporters,

We want to update you on an issue involving a third-party vendor that has supported CityLax’s online giving and related digital services for several years.

Like many 501(c)(3) organizations, we rely on outside partners to support our website, promote events, process donations, and securely handle donor information. For the past four years, CityLax worked with a vendor called Flipcause for these functions.

Earlier this year, we became aware that although Flipcause continued performing its other support tasks, it was not transferring donation proceeds to CityLax within the timeframe required under our agreement. We soon learned that other nonprofits using Flipcause were experiencing similar delays, and that issues involving third-party processors were becoming increasingly common across the nonprofit sector.

Over the following months, we pressed Flipcause for the release of the withheld donations. Despite receiving timely responses from the company, the funds remained largely unpaid. During this period, we took several steps to protect the organization and our donors:

• We disabled the donation features on our website that were connected to Flipcause and implemented a new system that does not rely on the vendor.

• We filed complaints with both the California and New York Attorneys General, who oversee nonprofit activity in their states.

• We initiated legal action against Flipcause in California to recover the outstanding donations.

Although a partial payment was eventually received after our lawsuit was filed, the remaining balance has still not been remitted, and no further progress has occurred since mid-October. Other nonprofits have taken action as well, including filing a class-action suit, and the California Attorney General has formally filed a complaint against Flipcause.

While we continue to pursue every available avenue to recover the full amount owed, we are also being realistic about the process ahead. Throughout this situation, our mission and the young people we serve have remained at the center of every decision we make.

We are grateful for your trust, and we will continue to keep our community updated as developments occur. The experience with Flipcause, while disheartening, has only strengthened our resolve and our commitment to the work we do every day.