MISHA Foundation

FDR-001

3 min read

FDR-001: HK-First Dual-Prong Structure

Context

MISHA Foundation needs a legal home. The founder is HK-resident with a French passport. Year 1 fundraising target is HK HNW patrons; Year 2+ adds US donors. Possible structures considered:

  • HK CLG only
  • US 501(c)(3) only
  • HK CLG + own US 501(c)(3) (own both)
  • HK CLG + US fiscal sponsor (this option)
  • Singapore CLG + US fiscal sponsor
  • Mainland China entity (Hong Kong holding)

Constraints in play: founder bandwidth (one person, no co-founder yet), Year 1 cash-flow tight, regulatory and reporting overhead must be minimal until first material gift, donor tax-deductibility matters in HK Year 1 and US Year 2+.

Options Considered

  1. HK CLG only — fastest, cheapest. Loses US tax-deductibility entirely. Forecloses US donor pipeline before Year 2 even starts.

  2. US 501(c)(3) only — slow (3-12 month IRS process), expensive ($5-15k legal), founder is HK-based so HK reporting & banking become awkward, Section 88 path closed for HK donors.

  3. HK CLG + own US 501(c)(3) — full optionality, but doubles incorporation cost, doubles annual reporting, and burns founder time year 1. Premature. Reconsider Year 3 once US flow justifies it.

  4. HK CLG + US fiscal sponsor ✅ — this option. HK CLG primary (HK donors with Section 88 once granted). US fiscal sponsor (e.g., Players Philanthropy Fund, Open Collective Foundation, Hopewell Fund) accepts US tax-deductible donations on MISHA’s behalf for ~5-7% admin fee until own 501(c)(3) makes economic sense.

  5. Singapore CLG + US fiscal sponsor — SG has lower tax + good charity governance frame. But founder is HK-based, costs more to operate remote, no Section 88 equivalent that helps HK donors.

  6. Mainland China entity — premature. China rare-disease charity registration is restrictive; reconsider Year 3+ if Mainland trial pipeline materializes.

Decision

Adopt option 4: HK CLG + US fiscal sponsor.

  • Incorporate MISHA Foundation Limited as a Hong Kong Company Limited by Guarantee with Articles of Association drafted to be Section 88-acceptable.
  • Engage a US 501(c)(3) fiscal sponsor for US tax-deductible inflow (vendor selected in Year 1 month 1-3, separate project).
  • Defer own US 501(c)(3) to Year 3 review point, gated on US donor flow exceeding ~$200k/year.
  • Defer Singapore and Mainland China entities indefinitely; revisit only if the strategic case is forced.

Consequences

Positive

  • Fastest path to a legitimate HK fundraising entity (≤30 days, ≤HKD 7,200 with optional lawyer review)
  • HK Section 88 path open Year 1 month 9-12
  • US tax-deductibility available without owning a US entity
  • Single-founder operationally feasible
  • Reversible: own 501(c)(3) can be added Year 3 if numbers justify

Negative

  • 5-7% admin fee on US donations (until own 501(c)(3))
  • Fiscal-sponsor-branded thank-you letters, not MISHA-branded (donor experience friction; mitigate via MISHA-branded follow-up)
  • Mainland donors not directly supported (route via HK)

Follow-up actions

  • index — execute Days 1-30
  • New project: US Fiscal Sponsor Selection (Year 1 month 1-3)
  • Section 88 application — Year 1 month 9-12
  • Year 3 review point: own 501(c)(3) decision (will be FDR-NNN)

Connections

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