Large Donations Policy & Strategy

Version 1.1 by Robert Schaub on 2025/12/21 14:01

Large Donations Policy & Strategy

Version: 1.0 | Last Updated: December 21, 2025 | Status: DRAFT

Executive Summary

Core Principle: No single donor may finance more than 20% of annual budget (exception: competitive public funding programs like Innosuisse).

Why: Editorial independence is the foundation of fact-checking credibility. Large donations create perception of bias, even when none exists.

IFCN Requirement: International Fact-Checking Network demands full funding transparency and proven independence.

Quick Decision Guide:

CHF 5K-80K → Accept (if <20% budget) + Publish donor name
CHF 80K-200K → Spread over years OR reduce to 20%
CHF 200K-1M → Propose foundation model
>CHF 1M → Endowment structure only (capital separate, only returns flow)

Always Reject:

Political parties
Media companies (Facebook, Google News, etc.)
Donor demands editorial control
Pharma companies (frequent fact-check subject)
Donors involved in active fact-checks

1. Legal Framework (Switzerland)

Tax Deductibility for Donors

Federal Tax:

Maximum deductible: 20% of net income
Example: Income CHF 500,000 → max. CHF 100,000 deductible

Cantonal Taxes:

Most cantons: 10-20%
Zurich: 20%
Zug: 20%
Geneva: 20%

Example: Donor with CHF 1M income can deduct max. CHF 200,000 (20%). If they donate CHF 500,000, only CHF 200,000 is tax-deductible.

No Legal Limits

Swiss law has NO cap on donation amounts. Donors can give CHF 1M, 5M, 10M - but only a portion is tax-deductible.

Anti-Money Laundering

For very large donations (CHF 100,000+):

Verify donor identity
Document source of funds
Report suspicious transactions to MROS

2. IFCN/EFCSN Requirements

IFCN Code of Principles requires:

Principle 2 - Funding Transparency
All fact-checking organizations must be transparent about funding sources.

Principle 3 - Methodology Transparency
Organizations must explain their fact-checking methodology.

Principle 4 - Open & Honest Corrections
Organizations must have transparent corrections policy.

What IFCN requires:

Publish all funders above threshold
2. Prove financial independence
3. No conflicts of interest
4. Editorial firewall - no influence on fact-checks

Typical thresholds among IFCN members:

Publish donors above CHF 1,000-5,000
Extra transparency for donors above CHF 10,000-50,000
Written editorial firewall agreements

Examples from IFCN Members:

Full Fact (UK)

Publishes all donors over £1,000
Policy: "No funder has any influence over our fact-checking"

FactCheck.org (USA)

Publishes all donors over $1,000
Maximum: Single donor may NOT finance >10% of budget

Correctiv (Germany)

Publishes all donors over €5,000
Rule: No single source may exceed 20% of budget

3. Risk Analysis

Credibility Risks by Donation Amount:

Amount	Risk Level	Notes
CHF 10K-50K	Low	No problem with transparency
CHF 50K-200K	Medium	Needs clear governance rules
CHF 200K-1M	High	Could be >20% budget → dangerous
>CHF 1M	Very High	Almost certainly >50% → toxic for credibility

Specific Risks:

Risk 1: Perceived Dependence
Even if untrue, perception damages credibility. Public thinks: "FactHarbor won't fact-check against main donor."
Solution: Transparency + Editorial Firewall

Risk 2: Actual Influence
Donor tries to influence fact-checks. Example: "I donate CHF 500K, but don't fact-check my company."
Solution: Clear contracts, no editorial rights, return donation if violated

Risk 3: IFCN/EFCSN Rejection
Too much dependence on single donor → IFCN could deny signatory status, EFCSN could reject membership

Risk 4: Partnership Problems
dpa, SRF, Full Fact might refuse cooperation if they question independence

4. Solution: The 20% Rule

Implement These Rules:

- 1. Publication Threshold
Publish all donors above CHF 5,000 (name, amount, optional purpose)
Publication: On website and in annual report

2. Maximum Rule (CRITICAL!)

Single donor maximum 20% of annual budget
Example: Budget CHF 500K → max. CHF 100K per donor
Exception: Multi-year commitments with exit strategy

3. Editorial Firewall

Written declaration: Donor has NO say in fact-checks
In donation contract: Explicitly stated
If violated: Return donation immediately

4. Diversification Goal

Minimum 5 funding sources
No source >30% over 2+ years

Add to Bylaws:

§ 10 - Financing and Donations

1. The association finances itself through:
   - Grants (Innosuisse, Gebert Rüf, etc.)
   - Donations from individuals and organizations
   - Services (within nonprofit regulations)

2. Transparency:
   a) All funders above CHF 5,000 are published annually
   b) Annual report with detailed financial overview

3. Independence:
   a) No single funder may finance more than 20% of annual budget
   b) Donors have NO say in fact-checks whatsoever
   c) Editorial Firewall must be in all agreements

4. Exceptions:
   Competitive public funding (Innosuisse, SNF, etc.) exempt
   from 20% rule when secured through academic partner.

5. Foundation Model (for CHF 1M+ donations)

When someone wants to donate very large amounts:

Option 1: Separate Foundation

Donor establishes own foundation with CHF 1M+
Foundation funds FactHarbor long-term at <20% annually
FactHarbor remains independent
Advantage: Foundation can fund other projects too

Option 2: Endowment Model

CHF 2M+ as capital stock in FactHarbor Foundation
Only returns (3-5%) flow to association → CHF 60-100K/year
Advantage: Sustainable, never >20% of budget

Option 3: Matching Fund

Donor matches other donations up to CHF 500K
Example: For every CHF 1 donated, major donor gives CHF 1
Advantage: Encourages diversification automatically

6. Governance Safeguards

Independent Ethics Advisory Board

Establish:

3-5 independent experts (journalism, academia, ethics)
Task: Monitor independence
Authority: Can reject donations if conflict of interest

Donation Rejection Policy

Always Reject:

Political party → REJECT
Media company → Only with strict firewall (critical!)
Government direct grant (except competitive public funding) → Critically review
Donor demands editorial control → REJECT
Donor involved in active fact-checks → REJECT

Examples:

✗ Meta/Facebook donates CHF 500K → REJECT (fact-check subject!)
✗ Political party donates CHF 100K → REJECT
✅ Philanthropic foundation donates CHF 100K → OK (with transparency)
✅ Tech company outside media CHF 50K → OK (e.g., SAP)

Conflict Management Process

When large donation arrives:

Step 1: Due Diligence (Board)

Who is the donor?
Any conflicts of interest?
Is source of funds clear?

Step 2: Ethics Board Review

Automatic for >CHF 50,000
Recommendation: Accept / Reject / Conditions

Step 3: Transparency Protocol

Document donation
Sign firewall agreement
Prepare publication

Step 4: Annual Review

Is diversification adequate?
Does donor exceed 20% threshold?
Exit strategy needed?

7. Implementation Steps

Before First Large Donation

Week 1-2: Amend Bylaws

Add § Transparency & Financing
2. Codify 20% rule
3. Define Editorial Firewall
4. Get General Assembly approval

Week 3-4: Prepare Documentation

Donation contract template (with firewall clause)
2. Donor due diligence form
3. Rejection letter template

Month 2: Website

Create "Our Funding" page
2. List all funders >CHF 5,000
3. Explain independence principles

When Donation Arrives

Step 1: Initial Conversation
Clarify: Motivation? Expectations? Accept 20% rule? Accept transparency?

Step 2: Due Diligence
Check: Conflict of interest? Legal source? Exceeds 20%? Political/media connections?

Step 3: Ethics Board (for >CHF 50K)
Consult 2-3 external advisors minimum

Step 4: Decision

Accept (if all criteria met):

Sign contract with firewall
Receive donation
Publish on website

Reduce:

Example: Donor wants CHF 200K, budget is CHF 500K
Proposal: Accept CHF 100K (=20%) OR spread over 2 years

Restructure (Foundation Model):

Example: Donor wants CHF 2M
Proposal: Separate foundation gives CHF 60K/year

Reject:

Irresolvable conflict of interest
Donor wants editorial control
Unclear source
Political party/media company

8. Example Scenarios

Scenario 1: Tech Billionaire - CHF 500,000

Context:

FactHarbor budget: CHF 400K
Donor: Swiss tech entrepreneur
Problem: CHF 500K = 125% of budget → TOO HIGH!

Solution Options:

Option A: Reduce to CHF 80K (20%)
"Thank you! We can accept maximum CHF 80K to maintain independence. Would you like to spread this over multiple years?"

Option B: Foundation Model
"Would you establish a foundation with CHF 500K that funds FactHarbor long-term (CHF 15-25K/year)?"

Option C: Matching Fund
"Could you match every donation up to CHF 250K? This helps us build diverse funding."

DO NOT: Simply accept CHF 500K → Credibility destroyed!

Scenario 2: Pharma Company - CHF 100,000

Context:

Donor: Novartis/Roche
Problem: Pharma is frequent fact-check subject!

REJECT!

Rejection letter:
"Thank you for your interest. Unfortunately, we cannot accept as pharmaceutical companies are regularly subject to fact-checks. We must avoid any appearance of conflict of interest (IFCN Code of Principles). Our editorial independence is non-negotiable."

Scenario 3: Anonymous Donor - CHF 50,000

Context:

Private person wants anonymity
Problem: Contradicts IFCN transparency

Solution:

Option A: Internal ID, Public Anonymous
"We must know your identity internally (due diligence), but can list you publicly as 'Private individual, CHF 50K'."

Option B: Fully Transparent
"For IFCN compliance, we must publish all donors >CHF 5K. Can we list you as '[Name], CHF 50K'?"

Option C: Below Threshold
"Would you donate CHF 4,500? Then it's not published."

DO NOT: Accept CHF 50K anonymously without internal verification → AML risk, IFCN violation

Scenario 4: Government - CHF 200,000

Context:

Swiss federal office funding
Problem: Government as funder is critical!

Distinguish:

Public Funding Programs (OK)

Innosuisse: ✅ (competitive, scientifically reviewed)
SNSF: ✅ (peer-reviewed)
Structured programs with academic partner: ✅

Direct Government Grants (CRITICAL)

Direct from minister/council: ❌ REJECT
"Government funds fact-checker" → Toxic!

9. Donation Contract Template

DONATION AGREEMENT

FactHarbor Association ("Recipient")
[Donor Name] ("Donor")

§ 1 - Donation
Amount: CHF [AMOUNT]
Purpose: General activities ☐ / Specific project ☐

§ 2 - Editorial Firewall (CRITICAL!)
The Donor acknowledges:
a) NO say in selection, execution, or evaluation of fact-checks
b) Recipient may fact-check ALL topics, including Donor
c) Donor will not influence editorial decisions
d) Violation → Recipient may return donation

§ 3 - Transparency
a) Published on website (name/amount) if >CHF 5,000
b) Mentioned in annual report
☐ Full name   ☐ "Private individual" (only if <CHF 50K)

§ 4 - Tax Receipt
Recipient issues receipt. Recipient is nonprofit.

§ 5 - No Quid Pro Quo
No expectation of services in return.

§ 6 - Return Right
Recipient may return if: conflict discovered, violates 20% rule,
or other problems.

§ 7 - Law: Swiss law, jurisdiction [LOCATION]

[DATE]
_____________          _____________
Donor                  President FactHarbor

10. Monitoring & Reporting

Quarterly Review

Every Quarter:

List all donations >CHF 5K
Calculate percentage of each donor
Check if anyone >20%
Identify risk donors
Update website

Annual Report

Publish:

- 1. Financial Overview
Total revenue
Breakdown: Grants / Major donations / Small donations / Services

2. All Funders >CHF 5K

Name, Amount, Percentage of budget

3. Independence Statement
"FactHarbor is independent. No funder influences our fact-checks. We follow IFCN Code of Principles."

Website: "Our Funding" Page

Include:

Principles:

20% Rule
Editorial Firewall
Transparency (publish >CHF 5K)
Diversification (min. 5 sources)

Current Funders (example):

Institutional Funding (65%)

Innosuisse Innovation: CHF 400,000
ETH Zurich Partnership: CHF 50,000

Foundations & Donations (25%)

Foundation A: CHF 80,000
Individual B: CHF 50,000
Company C: CHF 20,000

Small Donations (10%)

234 donors: CHF 65,000

Total: CHF 665,000

11. Long-Term Strategy

Year 1-2: Grants First

70% Institutional grants
20% Foundations/Medium donations
10% Small donations

Year 3-5: Diversify

40% Institutional grants
30% Foundations/Partnerships
20% Earned income (services, licensing)
10% Small donations

Year 5+: Sustainable

30% Endowment returns
30% Institutional grants
20% Earned income
20% Many small donations

Diversification Steps:

Combine multiple grants (Innosuisse, Gebert Rüf, Google, Prototype Fund)
2. Corporate partnerships (tech companies, NOT media) - each <CHF 50K
3. Small donor campaigns (1,000 × CHF 50 = CHF 50K)
4. Earned income (workshops, API licensing, consulting)

Summary & Quick Reference

✅ DOs

Enforce 20% rule (exception: competitive public funding)
2. Transparency: Publish all donors >CHF 5K
3. Editorial Firewall: Always in writing
4. Due Diligence: Verify donor identity
5. Ethics Board: Consult for >CHF 50K
6. Diversify: Minimum 5 sources
7. Monitor: Quarterly review

❌ DON'Ts

NEVER >20% from one donor
2. NEVER political parties
3. NEVER media companies
4. NEVER accept editorial control
5. NEVER without written firewall
6. NEVER without due diligence
7. NEVER hide donors (>CHF 5K)

Standard Response to Large Donors

"Thank you for your interest in supporting FactHarbor!

For credibility as an independent fact-checking organization,
no single funder may finance more than 20% of our budget
(IFCN Code of Principles).

With our current budget of CHF [X], we can accept maximum
CHF [20%] as direct donation.

Alternative models:
- Distribution over multiple years
- Establishing supporting foundation
- Matching fund model

Your support means a great deal. We're confident we can find
a solution that matches your intent while preserving our
independence."

Checklist Before Accepting

□ Amount <20% of annual budget?
□ NOT media company?
□ NOT political party?
□ NOT involved in active fact-checks?
□ Source clear and legal?
□ Contract with firewall ready?
□ Publication planned?
□ Ethics board consulted (>CHF 50K)?
□ Board approved?
□ Monitoring system ready?

All checked? → ACCEPT ✅

Related Pages:

FactHarbor Bylaws
Funding Sources
IFCN Signatory Application
Governance Structure
Transparency Policy

Document Owner: Board of Directors | Review: Annual

For Questions:

Legal counsel for contracts
IFCN for best practices
Other fact-checkers for experience