Although government funding often is part of the equation, the vast majority of U.S. nonprofits significantly rely on donations to function.

While an unlikely newsflash for most readers, this reality has multi-layered implications that need to be considered before the first donation ask is ever made.

A nonprofit’s very existence, let alone its success, depends not only on whether people give money, but also on whether that money actually gets to the (correct) organization.

You need donors, and you need a donation platform you can trust.

Recent Industry Failures

Unfortunately, 2025 saw multiple cases of blatant ethical and even legal violations from fundraising platforms in the U.S., leaving many nonprofits without money their donors intended them to have.

GoFundMe

GoFundMe, through its Nonprofit Pages program, created donation pages for roughly 1.4 million nonprofits without their knowledge or involvement. This was done using scraped public data.

  • These pages often included unauthorized use of nonprofits’ logos and other branding, as well as links to social media pages. In many cases, these links and branding were out of date or incorrect.
  • These pages often included a default tip of 16.5% that goes entirely to GoFundMe.
  • The donations flowed through PayPal Giving Fund, which can take between 15-45 days to reach the nonprofit.
  • For smaller nonprofits especially, these pages can outrank their own websites and donation forms.
  • In some cases, the PayPal Giving Fund can and will reassign donations to an organization to which the donor did not intend to give.

Flipcause

Flipcause faced a cease-and-desist order from the California Attorney General and a federal class-action lawsuit accusing them of withholding funds from their nonprofit clients.

  • Attorneys say more than 100 nonprofits across multiple states have been impacted – some nonprofits think they may not be able to continue operating because of the delayed funds.
  • The lawsuit claims $75,000 was withheld from the plaintiff organization, with millions of dollars in total withheld from nonprofit customers.
  • Flipcause policy is to release donations to nonprofits in 1-5 business days, but that often did not happen.
  • Flipcause CEO acknowledged the backlog in August and promised to fix it. The cease-and-desist order was issued in November as the fraud continued.

How to Choose Wisely

While there’s no way to completely protect against predatory behavior in the industry, there are things you can look for when choosing a fundraising platform to help avoid the above nightmares.

  • Seek a fundraising platform with a business model where funds settle directly from the processor (Stripe, Worldpay, etc.) to your nonprofit’s bank account, with your nonprofit as the merchant of record. Avoid platforms that use an aggregation model, where they receive your funds and then redistribute them to you. Ask whether your fundraising platform is in the money flow.
  • Read the fine print. Some of the issues described in the above sections, such as reassigning donations to different organizations, were written into company policy on their websites. Be sure to do a thorough check of all policies when choosing who will help you process your money.
  • Research the history of a provider before making your decision. If this is a company with a history of questionable integrity, it’s not worth it. It could be the difference between life and death for your nonprofit.
  • Longevity is a plus. It’s not that new fundraising platforms don’t have good things to offer, but there is something to be said for selecting an established fundraising platform with a proven track record of customer success and transparency.