Japan – Indicators of International Philanthropy from Asia

Japan – Indicators of International Philanthropy from Asia

This is the seventh in a series of twelve articles looking at factors influencing international philanthropy across ten Asian countries, paying particular attention to giving in the areas of international aid and education.

The study identifies nine country specific factors affecting the propensity of people to give offshore funds to these two causes. By using nine general indicators and adding the aid or education indicator, organisations working in either sector can assess background issues determining their ability to raise philanthropic gifts in a particular country. For a full explanation of indicators used, please refer to Article 1: Introduction to the series.

 

Assessment of international philanthropy from Japan

 

Political & Economic Security

Rating: 4

Comments: Japan is the world’s third largest economy and is considered a high income country. Japan’s economy has recently been negatively impacted by the 2011 Tsunami and the continuing effects of the global financial crisis. The country is considered to have low levels of corruption. [1]Euromoney Country Risk

Capital Accumulation

Rating: 5

Comments: 13,000 ultra high net worth individuals with collective wealth of $2,150 billion. [2]Wealth-X. 2011. World Ultra Wealth Report 2011: Uncovering Pockets of Opportunities

Incentives

Rating: 4

Comments: High level of incentives available for charitable giving. The recent economic crisis had a major impact on government attitudes towards NGOs and incentives provided. The Government Tax Commission revised the country’s tax system for donations in 2010, making 50% of funds donated to non-profits deductible. This has not had much effect on donations however, because of the difficulty in fundraising. A restrictive tax code in Japan is often cited as an important obstacle to the development of a strong domestic philanthropic sector. [3]Asia Pacific Philanthropy Consortium. 2002. Investing in Ourselves: Giving and Fund Raising in Asia [4]UBS Insead. 2011. Study on Family Philanthropy in Asia [5]The Asia Foundation. 1997. Funding Civil Society in Asia: Philanthropy and Public-Private Partnerships

Trust in NGOs

Rating: 3

Comments: The philanthropic sector in Japan is considered underdeveloped compared to other OECD countries. The average annual revenue of Japanese non-profits is significantly lower than other areas. In addition to this, many charity organisations in Japan do not formally register as nonprofits as the process is highly prohibitive and time consuming. [6]UBS Insead. 2011. Study on Family Philanthropy in Asia [7]The Asia Foundation. 1997. Funding Civil Society in Asia: Philanthropy and Public-Private Partnerships

Priority of Human Development

Rating: 2

Comments: Low level of giving to human development issues with greater emphasis on investment in education. Research suggests 1% of giving from family philanthropies in Japan goes to poverty alleviation and development. [8]UBS Insead. 2011. Study on Family Philanthropy in Asia

Propensity to Give Internationally

Rating: 2.5

Comments: Moderate level of giving to international causes by individuals and businesses. The Japanese government is a generous provider of overseas development assistance but individuals, families and businesses give less to these causes because of this. Research into the national giving focus suggests that 76% of Japanese direct their philanthropic efforts to national-level causes, but only 1% to local community initiatives. [9]Asia Pacific Philanthropy Consortium. 2002. Investing in Ourselves: Giving and Fund Raising in Asia [10]UBS Insead. 2011. Study on Family Philanthropy in Asia

Overall Level of Philanthropy

Rating: 2

Comments: Low level of philanthropy in Japan. Japan ranked 119 out of 153 in the World Giving Index for 2010 with 17% of the population donating to charity. [11]UBS Insead. 2011. Study on Family Philanthropy in Asia [12]Charities Aid Foundation. 2010. The World Giving Index: 2010.

Fundraising Practice

Rating: 1.5

Comments: Low level of fundraising practice can be illustrated by the near absence of fundraising for the country’s university sector, and that the professional association for fundraisers has only been established two years in Japan.

Development of Giving Foundations

Rating: 5

Comments: Highly developed foundation sector. Heavy focus on education and culture from grant making foundations. Foundations are usually formed by individuals but also occasionally by corporations. In 1993, there were 3000 grant making foundations which awarded a total of JY 80 billion in grants annually. [13]Asia Pacific Philanthropy Consortium. 2002. Investing in Ourselves: Giving and Fund Raising in Asia [14]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press [15]The Asia Foundation. 1997. Funding Civil Society in Asia: Philanthropy and Public-Private Partnerships

Financial Openness

Rating: 5

Comments: Japan received the highest possible score of +2.5 in the Chinn-Ito (KAOPEN) index for financial openness, indicating that it is a country with a high degree of capital account openness and minimal controls for cross-border transfers. [16]Chinn, Menzie D and Hiro Ito. 2008. “A New Measure of Financial Openness.” Journal of Comparative Policy Analysis: Research and Practice 10 (3): 309-322. [17]Chinn, Menzie D and Hiro Ito. 2010. “Notes on the Chinn-Ito Financial Openness Index 2008 Update.

Giving to Education

Rating: 5

Comments: There is a very high priority of giving to education in Japan. A study conducted by UBS-Insead found that 53% of giving from family philanthropies in Japan in 2010 was directed towards education. [18]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

The total scores for Japan are:

  • Index of International philanthropy for aid from Asia 34

  • Index of international philanthropy for education from Asia 37

Jacqueline Cameron

Jacqueline Cameron

Consultant & Research Manager at AskRIGHT
Jacqueline is a dedicated, motivated and results oriented fundraising professional. She enjoys the variety in fundraising, and brings broad experience to clients on all aspects: from identifying prospects to liaising with donors, advising on collateral, writing case statements and bequest brochures, data mining and analytics, and developing fundraising strategies.

To find out how Jacqueline can help your organisation, email j.cameron@AskRIGHT.com.
Jacqueline Cameron
Dr Daniel McDiarmid

Dr Daniel McDiarmid

Principal Consultant at AskRIGHT
Daniel is a highly experienced and innovative fundraising professional with more than 30 years of success raising funds for higher education, research, religious and other organisations in Australia and New Zealand.

To find out how Daniel can help your organisation, contact d.mcdiarmid@AskRIGHT.com.
Dr Daniel McDiarmid

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