Amid a flurry of fundraising and charity projects launched in the wake of last week’s deadly earthquakes in Kumamoto and Oita prefectures, the “hometown tax donation system” is gaining attention as a way of getting money directly to affected municipalities.
The hometown tax donation system (furusato nozei) is a way for individuals to donate to municipalities of their choice, and have almost all of the donated amount deducted from their income and residence taxes.
People can contribute to any city or town around the nation even if they were not born there. The program’s popularity has skyrocketed in recent years thanks to a growing selection of regional goodies donors can receive from municipalities in return.
On Sunday, Satofull, an online portal site that allows users to make the donations, started accepting money from individuals to help the village of Minamiaso, Kumamoto Prefecture, one of the areas most affected by the series of quakes and mudslides.
In the four days through Wednesday night, the site accepted pledges from 5,477 individuals to give a total of over ¥81 million through the tax donation system, according to Rika Saito, a Satofull official.
The company also started accepting donations on behalf of the city of Kikuchi, Kumamoto Prefecture, on Tuesday, and it collected more than ¥2.8 million in just two days.
Unlike in the normal tax deduction scheme, people donating to these communities do not get reciprocal gifts.
According to the internal affairs ministry, it is entirely up to each municipal government to decide how to use the money donated through furusato nozei.
This style of donating has caught on largely because people were frustrated with the way donations were collected and used in past disasters, experts say. Following the Great East Japan Earthquake of 2011, a total of ¥377 billion was collected through the Japanese Red Cross Society, the Central Community Chest of Japan (known by its red feather logo) and TV networks. But it took months and in some cases years for the money to clear layers of bureaucracy and finally reach disaster victims.
The furusato nozei system, in contrast, channels the money directly to affected communities, which are free to decide how to spend the money to meet their various needs.
Another online portal, Furusato Choice, run by Tokyo-based firm Trust Bank, had raised a total of ¥181 million from over 8,400 individuals as of Thursday evening. The site has tied up with the cities of Uki, Uto and Kikuchi, all in Kumamoto Prefecture, as well as Oita Prefecture, to accept donations on their behalf.
Meanwhile, the governments of Fukui Prefecture, the city of Ichikawa in Chiba Prefecture and the town of Sakai, Ibaraki Prefecture, are handling the paperwork on behalf of Kumamoto Prefecture, which has found itself overwhelmed with other post-quake duties. On the Furusato Choice website, Fukui, Ichikawa and Sakai are accepting donations on behalf of Kumamoto Prefecture. After a donation has been received, the three municipalities send the donor the documents they need when they file their tax returns.
Donors can contribute through this route by clicking on Fukui, Ichikawa or Sakai as donation destinations on the website.
One thing to note is that there are basically two kinds of donations: gienkin and shienkin.
Gienkin is a kind of cash handout made to disaster victims. It typically takes a lot of time for gienkin to reach victims because contributions from various sources are pooled into one account and experts discuss at length how to distribute the money fairly and evenly among the victims.
Shienkin is typically extended to NPOs/NGOs or municipal governments to help with their relief activities.