The "market size" of donations in Japan is estimated to be over one trillion yen
To begin with, let's examine the latest statistics from the "Donation White Paper 2021" published by the Japan Fundraising Association.
In 2020, individual givings are estimated to be 1,212.6 billion yen.
However, this figure includes 672.5 billion yen from “hometown tax” payments, which often include return gifts.
The 540.1 billion yen, excluding hometown tax payments, can be considered to be substantial individual givings.
Next, donations from corporations amounted to 672.9 billion yen in fiscal 2019.
The total of individual givings and corporate donations is 1,213 billion yen.
(Although there are other supporting forms of money that are similar to donations, such as “individual membership fees” of 298.9 billion yen and “foundation grants” of 119.5 billion yen, I have only mentioned “donations.”)
To put the figure of approximately 1,213 billion yen into perspective, consider these figures from similar industries:
- Sports shoes and apparel: Approximately 1.1 trillion yen
- Entertainment and sports management market: Approximately 1.2 trillion yen
- Health food/supplement market: Approximately 1.3 trillion yen
This comparison highlights the scale of the donation market relative to familiar goods and services.
How does it compare to overseas? The amount is about 1/34th that of the US, and the GDP ratio is about one-half that of the UK.
So, how does Japan's donation market size compare to the rest of the world? Is it large or small?
When comparing individual givings with the data listed in the Donation White Paper...
- US: 34,594.8 billion yen (1.55% of GDP)
- UK: 1,487.8 billion yen (0.47% of GDP)
- Japan: 1,212.6 billion yen (0.23% of GDP)
Compared to the US, you can see that there is an overwhelming difference of about 1/34th.
It is about half the size of the UK, so you can see that Japan's donation market is extremely small compared to its economic size.
Increasing trend in donations triggered by the Great East Japan Earthquake of 2011
However, addressing the question, 'Are Japan's donations continuing to stagnate?', reveals that this is not the case.
Examining the recent trends in individual givings, we find that in 2010, they amounted to 487.4 billion yen.
Of course, the economic downturn caused by the Lehman Shock was probably also a factor. However, you can see that the amount is much smaller than it is now.
In 2011, the year of the Great East Japan Earthquake, it more than doubled to 1,018.2 billion yen.
This is because a large amount of money went to donations to disaster-stricken areas, including the Tohoku region.
Donations decreased in 2012 but have since gradually increased, reaching 600-700 billion yen (including hometown tax) by 2016.
It has been growing steadily in the 2010s, perhaps due to the economic boom brought about by Abenomics.
Prospects for donation market growth in the 2020s: Insights from consumption trends
Summarizing my findings from the statistical data in the Donation White Paper...
- Japan's donation market is approximately 1.2 trillion yen (about 540 billion yen from individual givings alone, excluding hometown tax payments), which is a reasonable amount.
- However, compared to developed countries such as the United States and the United Kingdom, the economy is significantly smaller.
- In the 2010s, it grew due to the Great East Japan Earthquake and economic recovery (more than doubling in 10 years)
Up to this point we have talked about past statistical data, but now we will start predicting the future.
Why is the donation market growing?
Will this growth continue, or is it a temporary trend?
"The habit of donating began to take root after the Great East Japan Earthquake."
"Awareness of contributing to society is increasing among the younger generation."
"This is a temporary movement, and a culture of donation will not take root in Japan."
There are various discussions going on, but I personally believe that long-term trends related to consumption are behind the growth in donations.
Younger generations are spending less money on products that have traditionally been associated with status, such as cars, owning a home, and luxury brands.
Amid this shift away from things, a trend called "human consumption" has emerged, such as “buying brands that you can relate to” and "using stores and services of people you want to support."
It is observed that people, particularly in developed countries who can afford a comfortable lifestyle, are increasingly spending money on activities that provide spiritual satisfaction.
In this context, the fact that “altruistic behavior increases happiness” is attracting attention.
Several psychological experiments have shown that people tend to be happier when they give someone a gift (even if it's to a stranger) than when they buy something for themselves.
(Refer to the article “5 reasons why I decided to focus on fundraising until 2020”)
Donations are the most altruistic use of money.
And it can be said to be the ultimate form of formless consumption.
"I would like to participate in some way in an organization or activity that resonates with my thoughts."
"I want to express my individuality through the act of spending money."
"Even in my hectic days, I want to feel like I'm helping the world."
The donation market has grown because the donation product has captured the needs of these people, and there is plenty of room for growth in the future. That is what I think.
