Skip to content

Large Donations Policy & Strategy

Executive Summary

Info

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 Context: The International Fact-Checking Network demands full funding transparency and proven independence from its signatories. FactHarbor is not an IFCN signatory; this policy is designed to align with those principles.

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

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.

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

Warning

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:

  1. 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:

Error

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

Error

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

Warning

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

Warning

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

4. Solution: The 20% Rule

Success

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

Error

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

Milestone: Amend Bylaws

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

Milestone: Prepare Documentation

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

Month 2: Website

  1. 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:

Success

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."

Error

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!

Error

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, in line with the IFCN Code of Principles our policies are designed to align with. Our editorial independence is non-negotiable."

Scenario 3: Anonymous Donor - CHF 50,000

Context:

  • Private person wants anonymity
  • Problem: Contradicts IFCN transparency

Solution:

Success

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 "Our funding policy is designed to align with IFCN transparency principles, so we 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."

Error

DO NOT: Accept CHF 50K anonymously without internal verification → AML risk, contrary to the IFCN transparency principles this policy follows

Scenario 4: Government - CHF 200,000

Context:

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

Distinguish:

Success

Public Funding Programs (OK)

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

Error

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

Periodic Review

Periodically:

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

Annual Report

Info

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. Our governance is designed to align with the IFCN Code of Principles (we are not an IFCN signatory)."

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:

  1. 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

Success

  1. 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: Periodic review

❌ DON'Ts

Error

  1. NEVER >20% from one donor

2. NEVER political parties 3. NEVER accept editorial control 4. NEVER without written firewall 5. NEVER without due diligence 6. 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
(our own statutory rule, designed to align with IFCN
funding-independence 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 (planned — not yet submitted)
  • 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