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Not-for-profit news organisations are increasingly funded by private foundations, supported by wealthy entrepreneurs. This raises a range of ethical dilemmas for journalists, which are particularly serious when their donors are alleged to have been involved in unethical or illegal activities. Although this is a relatively common occurrence in the non-profit sector, so far there has been no critical discussion of these issues in relation to foundation-funded journalism. In this article, we interrogate a rich and detailed case study of the relations between a non-profit news organisation and a donor accused of being involved in a massive, international fraud scandal. We document how the news outlet justified their acceptance of this donor’s money; the defensive strategies they used to protect their reputation, organisational values and editorial freedom; and the conditions that ultimately led to journalists parting ways with the foundation. In so doing, we draw on ideas about philanthrocapitalism, stakeholders and resource dependence in order to develop model of how nonprofits respond to “tainted” donors.