Can we create custom forms (membership and donation) or must we use templates.

Yes you can, please check these guides:

http://www.jotform.com/help/47-Order-Form-Basics

http://www.jotform.com/help/49-Order-Form-Types

http://www.jotform.com/help/165-Setting-Up-Your-First-Order-Form

On regards of templates, you can use anyone you want, here is how to use a Form Template: http://www.jotform.com/help/106-How-to-Use-the-Form-Templates

Let us know if you have more questions, we will be glad to assist you.