To be able to control exactly which FAT type is selected will require using diskutil from the Terminal. Here's how.
First you need to check which device the disk you're trying to format is. This is done with the diskutil list command. Open the Terminal app and run the command before plugging in your SD card/USB disk/stick. That will give you a list of disks and their device numbers.
Then, plug in the disk you want to format and run the command again. The list of disks will be updated with the one you're wanting to format - likely the last in the list. Take a note of its device number e.g. /dev/disk3 in the example here.
To format that disk as FAT32, run the following command (change the device number as required)...
You will be asked to enter your password, then the disk will be formatted and the name "USB" assigned to it. If you want to assign a different name, replace it in the command - make sure to surround it with quotes if you want a space in the name.
Running diskutil list after formatting will confirm that the disk is indeed formatted as FAT32.