Seven Essential Questions Nonprofits Should Ask Any Software Provider

When news breaks about a fundraising platform withholding donations or mishandling nonprofit funds, it shakes the entire sector. It shouldn’t be this way—but it happens more often than many realize.

The recent cease-and-desist order issued in California has raised an uncomfortable but necessary question: Are nonprofits equipped with the right information—and the right questions—to evaluate whether a technology provider is truly ethical, transparent, and safe?

Nonprofits deserve more than shiny features and low (or “free”) price tags. They deserve clear answers, transparent operating models, and partners who protect donor trust as fiercely as they do. Before signing a contract or moving fundraising online, here are the most important questions every nonprofit should ask.

1. “How do you handle donor dollars once they’re given?”

This is the most critical question—and the one many nonprofits understandably assume has a simple, clean answer.

But providers differ dramatically in how they move money:

• Some pass funds directly to nonprofits within a few days.
• Others hold donations in their own bank accounts—sometimes for weeks or months.
• Some even use the revenue generated from donations to run their own operations.

When a platform holds charitable funds, it introduces risk, delays, and compliance exposure. In some cases, it can look alarmingly similar to acting as a bank—but without the safeguards, regulations, or legality required of financial institutions.

Ask:

• How long do you hold donor funds?
  
• Are nonprofit funds ever co-mingled with operating cash or used as working capital?
  
• Is my organization’s money kept in a segregated account?
  
• Do you guarantee a payout timeline?
  

If the answer is vague, complicated, or evasive—that’s your answer.

2. “Are you properly registered and compliant as a charitable fundraising platform?”

In many states, fundraising platforms are legally required to register and meet specific compliance standards. These regulations exist to protect nonprofits and donors—and reputable providers take them seriously.

Ask:

• Are you registered as a fundraising platform in every state where we will fundraise?
  
• Can you provide documentation of your registration?
  
• How do you stay in compliance with state and federal rules?
  

Nonprofits shouldn’t have to become compliance experts to stay safe—but they should expect their technology partners to be.

3. “What is your business model as a software provider—and how do you make money?”

This is where things get interesting.

Some platforms charge predictable subscription fees. Some rely on transaction fees. Some rely on donor tipping and “optional” add-ons. Some use complex credit systems. And some subsidize “free” offerings by monetizing or withholding donor activity.

A lack of transparency in the business model is often the first red flag.

Ask:

• What is the primary revenue source for your company?
  
• If your platform is “free,” how do you pay for your operations?
  
• Are there any costs passed to donors without our knowledge?
  
• Do you incentivize donor tipping or default donors into optional fees?
  

If you cannot explain a company’s business model in one sentence, it’s too complicated.

4. “How fast do payouts occur, and what happens if something goes wrong?”

Delayed payouts aren’t just inconvenient—they can stall programs, affect payroll, and damage donor trust.

Technology partners should give nonprofits full visibility into:

• How funds move from donor to bank
• Expected timelines (“not estimates”)
  
• Escalation paths if something is delayed
  
• Who is responsible if there is a transfer failure
  

Ask:

• What are your average payout times?
  
• What is your guaranteed maximum payout window?
  
• Do you have dedicated human support if something goes wrong?
  
• What is your escalation process?
  

Timely access to donor dollars is not a luxury—it is a necessity.

5. “What messages or fees will donors see during the giving process?”

Platforms increasingly insert messages within the giving process for donors to cover processing costs.  If these messages are not worded carefully and transparently they can introduce friction to the donation flow—often without nonprofits realizing it.

Examples include:

• Suggested “tips” to the platform
  
• Hidden fees
  
• Unclear language that confuses donors
  
• Automatic opt-ins
  

These practices can create mistrust and reduce conversion, even if the nonprofit never intended it.

Ask:

• Can we fully preview and customize the donor experience?
  
• Are there any fees or tips shown to donors by default?
  
• Can donors give without being upsold?
  

Donor experience is sacred—and nonprofits deserve full clarity into any prompts or messages that shape that experience.

6. “What data do you collect, and how do you use it?”

Donor data is mission-critical. Nonprofits should know:

• Who owns the donor information
  
• Whether the provider shares data with third parties
  
• Whether donor behavior is used to fuel the platform’s own marketing
  
• What happens if the nonprofit switches providers
  

Ask:

• Who owns our donor data?
  
• Do you share or sell donor insights outside our organization?
  
• What is the process for exporting our data and migrating our recurring gifts if we leave?
  

Trust isn’t only financial—it’s digital.

7. “Can you explain everything you do in plain language?”

This might be the most telling question of all.

If a provider can’t explain their:

• Money movement
  
• Business model
  
• Compliance standards
  
• Data policies
• Donor experience

…in a clear, simple way, they may not be operating simply. Transparency shouldn’t need translation.

Nonprofits deserve ethical, transparent partners

Nonprofits shouldn’t have to decipher hidden business models, wonder where their donor dollars are being held, or question whether a platform’s incentives align with their mission. Yet that’s exactly what happens when technology companies introduce friction, hide fees in fine print, or design experiences that benefit the platform more than the nonprofit. 

Any model that injects confusion, locked prompts, or unnecessary steps chips away at trust. 

At Bloomerang, we believe trust is built through clarity and integrity at every step of the giving journey. Donor dollars should move quickly and cleanly to the nonprofit. The donor experience should remain free of tricks, upsells, or manufactured friction. 

A better future starts with each of us

Trust isn’t a feature; it’s the foundation of fundraising. Nonprofits deserve partners who honor that foundation with every decision, every payout, and every product choice—and who understand that technology’s role is not to insert friction, but to strengthen the connection between mission and generosity.

Choosing the right technology partner shouldn’t be a gamble—and nonprofits shouldn’t have to decode hidden models or wait months for donor funds.