“If I could go back 18 years, I would propose using Furusato Nozei as an opportunity for donors, NPOs, and local governments to work together.”
Korea’s Hometown Love Donation (Gohyang Sarang Gibu) has entered a phase of expansion, with debates over allowing corporate donations and increasing tax credits. What questions does Japan’s experience, as a country that went down this path first, raise for Korea? On September 30, 2026, this interview took place at the Japan Fundraising Association (JFRA) with Shunsuke Ohishi, a Manager who leads Giving Japan, the association’s survey of giving in Japan. This year’s survey focused on Japan’s hometown tax donation system, Furusato Nozei. The interview covers the strengths and shortcomings of the system now in its 18th year, and what Korea should prepare for.
Q. What was the background to the launch of Furusato Nozei in Japan?
The main goal was to narrow the tax revenue gap between the regions and the Tokyo metropolitan area.¹ Japan has about 1,700 local governments, and most of them are outside the metropolitan area. About 30% of the population is concentrated in the metropolitan area. As people from the regions moved to big cities, tax revenue became concentrated there. Easing this gap was the core purpose. So although it is called a “tax payment” (nozei), it is legally defined as a donation. At the time, NPOs raised objections. Some said lavish return gifts would undermine the culture of giving. Others said the tax benefits were unfair to private nonprofits and would reduce donations to NPOs. However, the system was introduced without major changes. Later, collaborative initiatives emerged that used Furusato Nozei to support NPO activities.
Q. Looking back over 18 years, has Furusato Nozei eroded existing giving?
To give the conclusion first: no, it has not. The latest survey, Giving Japan 2025², found that Furusato Nozei users and existing individual donors are largely separate groups with little overlap. Furusato Nozei has grown rapidly, to the point of accounting for more than 60% of all individual giving. But that growth did not lead to a decline in existing individual giving. If anything, it has been closer to a boost for the giving market as a whole.
[Editor’s Note] This conclusion, however, should not be applied directly to Korea. The separation of the two groups in Japan appears to reflect, in part, differences in how the two countries’ systems are structured. In Korea, participation in and amounts given through the Hometown Love Donation program are growing quickly, but its effect on existing giving has not yet been sufficiently studied. Some have raised concerns about possible crowding-out, where existing giving declines as participation and amounts grow. Whether Japan’s finding of “no crowding-out” will hold in Korea remains to be seen.
Q. That seems different from saying “giving has increased.” What motivates ordinary citizens to participate?
That’s right. According to the same Giving Japan 2025 survey, more than 90% of users participate mainly for tax savings and return gifts, and they do not really consider it a donation. Fewer than 10% participate out of a genuine motivation to give. On intermediary websites, too, the return gifts on offer are the most prominently featured, so people likely choose where to give based on the gifts. I suspect most users are not deeply concerned with how the funds are utilized. There is an option to decline the return gift and leave the use of funds to the local government, but only a very small minority choose it. The system has changed how people think, and it has taken on a meaning far removed from its original purpose. So the task ahead is to find ways to grow that 10%.
Q. How are issues such as overheated competition over return gifts, and the burden on central government tax revenue, being addressed?
According to a notice from Ministry of Internal Affairs and Communications (MIC), a regulation takes effect on October 1 that caps return-gift-related costs at 47.5% of the total. Of that, the gift itself is limited to 30%, with procurement and promotion making up the remaining 17.5%.³ I think this shows that MIC is also concerned about competition among local governments over return gifts. On the other hand, there is little public opposition to the growing burden on central government revenue. Perhaps this is because Furusato Nozei donors care a great deal about the benefits they receive, but very little about where the tax revenue goes. In the end, I believe the key to a solution is changing how people think about giving and mutual support.
Q. What would you most like to tell Korean NPOs?
Collaboration between local governments and NPOs. In Japan, collaborative initiatives have been emerging, partly in response to the concerns raised when Furusato Nozei was introduced. Several international comparative surveys have found that trust in NPOs in Japan remains low, while trust in local governments and other public institutions is high. Local governments have trust; NPOs have program expertise and the capacity to deliver. By working together, each can make up for what the other lacks. Saga Prefecture is one of the leading examples. With the aim of fostering and growing NPOs in the prefecture and accelerating solutions to local issues, Saga created a structure that channels Furusato Nozei into donations to NPOs.⁴ As a result, NPOs that had achieved results elsewhere have opened offices in Saga. By working with NPOs on a range of projects, the prefecture appears to be making progress on local issues. Shibuya City is attempting something similar, and I think designing programs around specific themes makes this much easier.
[Editor’s Note] Saga Prefecture’s Furusato Nozei × NPO Collaboration Model
Saga Prefecture runs its own structure called “Furusato Nozei (Designated Donations to NPOs, etc.).” When a donor designates an organization in the prefecture that they wish to support (an NPO, civic group, etc.) and donates, the prefecture grants 85% of the donation to that organization for program costs and uses only the remaining 15% for fundraising and administrative expenses. The system itself addresses NPOs’ biggest concern: securing funding. As of FY2025, 118 organizations are eligible, and total donations have reached about 588 million yen.
Supporting research toward a cure for type 1 diabetes: Japan IDDM Network. Type 1 diabetes is an intractable disease, mainly affecting children and adolescents, in which the pancreas does not produce insulin, requiring lifelong insulin injections. This organization directly funds cell transplantation and cure research that governments and large companies are reluctant to invest in. After it began using Furusato Nozei in 2014, its income grew substantially. Since 2008, its research grants have totaled 187 grants and about 1.03 billion yen (15 grants and about 100 million yen in FY2025). It is an example of building a nationwide donor base that extends beyond patients’ families to people who care about treating intractable diseases.
Protecting and rehoming abandoned animals: an animal welfare NPO. This program works to reduce euthanasia of abandoned or rescued dogs and cats. Donations cover health care such as microchipping and medical treatment, while the NPO leads sheltering and adoption activities. It has helped lower the euthanasia rate of abandoned animals and foster a more responsible pet culture.
Meal support for children and families facing food insecurity: a community welfare NPO. Going beyond government-run meal programs, the NPO delivers warm lunch boxes and groceries directly to families with children and checks in on how they are doing. Because donations translate directly into “food on children’s tables,” the program has drawn donors’ empathy and recurring gifts.
Conserving the Niji-no-Matsubara pine forest: an environmental NPO. This program responds to the aging and environmental degradation of Niji-no-Matsubara in Karatsu City, one of Japan’s three great pine forests and a national Place of Scenic Beauty. Environmental NPOs, residents’ associations, and volunteers take on work that public staff alone cannot manage, such as clearing fallen needles, removing undergrowth, and planting pines. Donations fund equipment and environmental education programs.
The key to success: direct communication between donors and NPOs. Donors receive more than a tax benefit. The organization they designated sends them concrete reports such as, “Your donation advanced treatment research this far, and delivered these meals to children.” This sense of impact turns one-time gifts into ongoing engagement.
Q. Are there institutional differences Korea should pay attention to?
There are two. First, Korea should avoid growing individual giving through excessive return gifts. In Japan, there are cases where the system is used in ways that diverge from its original intent. Interest in, and relationships with, the receiving local government should be what drives support. Second, corporate giving. Korea is seeking to expand eligible donors from individuals to companies. In Japan, however, corporate Furusato Nozei is a separate system, launched in 2016 as part of regional revitalization policy, and it falls under a different government office.⁵ When a company donates to a local government’s regional revitalization project, the combination of expense deduction and corporate tax credits allows up to 90% of the donation to be offset. However, the donation must go to a local government other than the one where the company is headquartered. The minimum donation is 100,000 yen, but companies face various constraints in giving to regions where they have weak ties. As a result, it has not spread nearly as widely as individual Furusato Nozei.
Q. If you could go back 18 years, what would you do?
I think I would propose, once again, the perspective of using Furusato Nozei to build ongoing relationships between donors and local governments. Right now, in many cases, the process ends with receiving a donation and sending a return gift. If local governments create regular points of contact with donors, I believe that would lead to cultivating fans of the region.
I would also propose collaboration with NPOs. Many regional local governments face a wide range of issues that are often hard to address on their own. It is also hard for them to respond to the fine details on the ground. That is exactly where NPOs are strong. If specialized NPOs work with local governments on each issue, with NPOs handling the detailed, hands-on work, steady progress would be possible. Korea is still at an early stage. I hope that, starting now, Korea will focus on creating points of contact with donors, building a track record of collaboration with NPOs, and changing how donors think about giving.
Editor’s Closing Remarks
Mr. Ohishi’s account leaves Korea with a clear question. Growing the size of a system and having that giving take root as “real giving” are two different matters. And the key to closing that gap lies in collaboration between local governments and NPOs. There are also points to examine before expanding the current system. The fact that a large amount has been raised is not, by itself, enough to judge the system a success. The first step is to confirm whether the funds have been used in line with the system’s original purpose. Moreover, unlike Japan, Korea has no provision prohibiting carryover of funds, and in both countries the system is partly seen as little more than tax savings and return-gift shopping. Hasty expansion of the system calls for caution.
* Commentary outside the interview answers, the boxed text, and the closing remarks reflect the views and writing of the editor.
* Excerpting and quoting parts of this interview is prohibited. When citing, please present the full text so that the context is not distorted.
References
- The official MIC website describes it as follows: “Many people are born in regional hometowns and grow up receiving various resident services, such as medical care and education, from those local governments. Then, upon entering university or starting work, they move their lives to cities and pay taxes there. As a result, urban local governments gain tax revenue, while the hometown local governments where they were born and raised receive none.” (https://www.soumu.go.jp/main_sosiki/jichi_zeisei/czaisei/czaisei_seido/furusato/about/index.html)
- Japan Fundraising Association, ed. (2025). Giving Japan 2025 (Kifu Hakusho 2025). Japan Fundraising Association.
- MIC, “On the Proper Operation of the Furusato Nozei System” (Sōzeishi No. 108, September 25, 2026). (https://www.soumu.go.jp/main_content/001093390.pdf)
- Saga Prefecture website, “Furusato Nozei (Support for NPOs, etc.).” (https://www.pref.saga.lg.jp/kiji00331962/index.html)
- Cabinet Office website, “Corporate Furusato Nozei Portal Site.” (https://www.chisou.go.jp/tiiki/tiikisaisei/kigyou_furusato.html)
Written and Translated by: Minjung Chung