Nearly $600 billion flows into US charities each year. As online giving grows, the mechanics of moving that money and tracking donor data are increasingly in the hands of a group of for-profit companies. For the nonprofits and the communities they serve, relying on this “intermediary economy” between donor intent and nonprofit mission is a convenience, but one that comes with a growing power imbalance. When these for-profit intermediaries act in their own best interests instead of those of nonprofits, the results can be damaging, even catastrophic to organizations—and the regulators charged with protecting the public trust are only beginning to catch up.
Regulatory oversight of charitable fundraising platforms is, in most of the country, light to nonexistent.
Recently, there have been examples of what that nonprofit vulnerability looks like in practice. In late 2025, the donation platform Flipcause collapsed, leaving 3,200 nonprofits with a collective $29 million hole in their budgets while the platform’s executives pocketed millions before going bankrupt. Meanwhile, GoFundMe was caught launching 1.4 million fundraising pages in nonprofits’ names without consent, tacking on fees the organizations never authorized.
In both cases, attorneys general were compelled to intervene—not to prevent harm but to react to a crisis already well underway.
The Regulatory Gap
Regulatory oversight of charitable fundraising platforms is, in most of the country, light to nonexistent.
It wasn’t until 2021 that California became the first state to pass a law establishing requirements that might seem obvious: Fundraising platforms must register with the state, obtain written consent before soliciting in a nonprofit’s name, disclose fees, keep donations in a separate account, and promptly deliver donations to nonprofits. It finally took effect in 2024. Hawaii followed suit with a similar law set to go into effect June 30, 2026. Most other states have nothing comparable.
As federal funding cuts shrink government support, nonprofits are more dependent on individual donors giving online, which means they are also more dependent on the commercial platforms that are gatekeepers of those transactions.
Even when regulations exist, they are not necessarily enforced in time to matter. When Oakland Voices investigated compliance with California’s law in late 2025, the local media outlet found that nearly one in five fundraising platforms operating in California were not even registered—either their registrations had expired or never existed. Even today, California’s Registry of Charities and Fundraisers through the state’s Office of the Attorney General lists several familiar platforms that let their registrations expire, including BetterWorld, Blackbaud, and Bonterra; and others that never registered at all, including Bloomerang, CauseVox, ClickBid, Funraise, and OneCause.
Operating outside of regulation allows companies to avoid mandatory reporting that discloses total funds raised, fees charged, and how long it takes to distribute money. Without these public filings, nonprofits have no verifiable way to know if they are receiving the full amount of donations intended for them.
The Structural Gap
The problem is as much structural as it is regulatory. Small nonprofits typically lack the technical staff and legal expertise to evaluate the practices of the platforms they rely on, let alone hold anyone accountable when something goes wrong. They hand over donor data and payment processing, and trust that the platform will do the right thing and send the money.
This creates a stark power imbalance. For-profit companies now control the donor data, payment infrastructure, and timing of transferring money. As federal funding cuts shrink government support, nonprofits are more dependent on individual donors giving online, which means they are also more dependent on the commercial platforms that are gatekeepers of those transactions.
The High Cost of an Anomaly
The collapse of Flipcause offers a grim case study in what happens when that gatekeeper role is exploited.
Flipcause had been operating in a regulatory vacuum, using a “single merchant of record” system that concentrated power in the hands of the platform rather than its thousands of small nonprofit clients. Every donation flowed into a single company bank account controlled by Flipcause, effectively forcing nonprofits to request their own money. By the time California Attorney General Rob Bonta issued a cease-and-desist in late 2025, the damage was done—$29 million in donations had vanished into the company’s failing operations and executives’ pockets.
When the company’s assets were put up for sale in February 2026, only one company made an offer: Software4Nonprofits, owned by Evermore Holdings Group, a Delaware-based company that acquires software businesses.
Evermore’s cofounders and co-CEOs, Scott Rassatt and Danny Vivier, told NPQ that the Flipcause model was a departure from industry standards. “What [Flipcause’s owners] were doing was an anomaly,” Vivier said.
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Software4Nonprofits instead uses an “independent merchant model,” where donations bypass the platform entirely and land directly into the nonprofit’s own bank account within days. Each organization must go through underwriting with a Level 1 PCI-compliant payment processor, a security framework that verifies it is a legitimate entity to receive funds. Vivier noted that while the independent merchant model requires more setup, they’re confident “it is going to solve the problem that led to this crisis in the first place.”
While Vivier said they’ve met with a California deputy attorney general, NPQ found that currently neither Software4Nonprofits nor Evermore appear in the state Registry of Charities and Fundraisers at all.
As for the missing $29 million, Rassatt and Vivier were candid that they can’t pay it back. “There’s a legal process that has to be followed a certain way,” Vivier said, pointing nonprofits to file a claim in the bankruptcy case. Because nonprofits are classified as unsecured creditors, they will be last in line to recover funds.
The new owners have focused on what they can control: waiving past-due fees, providing discounts, and getting nonprofits’ fundraising pages back online just weeks after the sale’s completion. “We’ve got a team of 20-plus people working on this,” Vivier said, “and that’s an investment that we are making on behalf of the organizations.”
Whether that is enough is ultimately up to their nonprofit customers to decide.
Generosity Depends on Trust
While Software4Nonprofits works to restore trust with a few thousand organizations, one of the world’s most recognized names in online fundraising was caught exploiting the trust of millions.
In October 2025, a report from ABC7 Bay Area revealed that GoFundMe had quietly auto-generated 1.4 million unauthorized donation pages for US nonprofits. GoFundMe used advanced SEO techniques to push these pages above the nonprofits’ own websites in internet search results, inserting itself uninvited into the relationship between a donor and a nonprofit. Many organizations discovered the pages only after they’d been published, often with incorrect information GoFundMe had scraped from IRS data and other sources. GoFundMe also upsold donors with a default “tip” of approximately 16.5 percent on donations, and charged the nonprofit additional credit card transaction fees and a 5 percent fee for monthly giving—money that went to GoFundMe, not the nonprofit.
Facing widespread negative reactions, GoFundMe backpedaled, making the pages available only if nonprofits opted in and undoing the company’s advantage in search results for unclaimed pages.
The GoFundMe episode and Flipclause collapse make it clear that the intermediary economy holds a place of significant power that for-profit companies can, and do, exploit.
The regulatory response lagged behind. It wasn’t until March 2026—five months after the story broke—that a bipartisan coalition of nearly two dozen attorneys general formally demanded proof that all these “plagiarized” pages had been removed and meaningful reforms put in place. Days later, Alaska Attorney General Stephen Cox went further, filing lawsuits against six platforms—GoFundMe, PayPal, Charity Navigator, JustGiving, Pledge, and Network for Good—alleging they were soliciting donations without consent in violation of state laws.
Cox framed the legal action as a defense of the sector’s integrity, noting that “generosity depends on trust.” He asserted that by hijacking the reputations of organizations, platforms like GoFundMe were leaving donors to wonder if their gifts ever reached their intended destination. Cox is seeking civil penalties and court orders to compel companies to stop the practices.
Reclaiming Nonprofit Power
The GoFundMe episode and Flipcause collapse make it clear that the intermediary economy holds a place of significant power that for-profit companies can, and do, exploit. Whether underregulated for-profit fundraising platforms are the right way to steward donations of mission-driven organizations remains a central tension for the sector.
For now, the viability of nonprofits is dependent in large part on the voluntary ethical standards of profit-driven companies and their owners and investors. Without proactive, nationwide protections from regulators, the sector is left waiting for the next anomaly to reveal just how little control nonprofits really have.
