*BOOOOM*
Like it has been said before, we're trying to keep our chances low on being sued by Nintendo, by creating everything from scratch. We removed the donate option from our website, because we don't need the extra money at the moment to keep servers running. Although we get some money from the Google ads at the top of the page, so keep clicking on them
Making everything from scratch is the main reason it's taking us so long to release Pokemon Universe, because it is hard to find skilled people who are willing to put a lot of time and effort in this game without getting anything in return (except for being worshiped by almost 60k people).
It's especially hard to find (and mostly keep) pixel artists, because for some reason most of they always leave us without proper notice
The problem is that we especially NEED pixel artists for all the original content we need to create an exciting world. We are hoping we will get more pixel art applications once we have released the first beta.
Going back on-topic since I drifted away. We can't give you a 100% answer on that Nintendo is not going to shut us down, because we're still using the Pokemon name so in the end they have all the right to shut us down. But we're trying to find ways to keep the "infringement" to a minimum so we are less of a threat.
As for a back-up plan, we don't really have one. The plans which have been said above have crossed our minds but we don't have anything concrete. We'll see once I receive a letter from Nintendo on my doormat. We could always start a petition for Nintendo to take us over, so we actually work for Nintendo :3