TOKYO (Nikkei)--The financially distressed Osaka Prefecture has been the biggest beneficiary of a new tax scheme introduced in May that gives a credit for taxpayers making contributions to their hometowns.As of the end of June, Osaka had received 6.93 million yen of donations under this system -- an amount much larger than that collected by the second biggest recipient, Tokushima Prefecture.Some local governments are trying to attract donations by offering gifts -- usually famous local products, such as beef or melons. Osaka, however, offers no such prize. People who donate their money to the prefecture under the scheme receive nothing but a thank-you letter signed by Gov. Toru Hashimoto. Instead, the prefectural government stresses its fiscal hardships and promises to use the donations for efforts to revitalize the local economy. The strategy has apparently worked.The tax-credit-for-donations program, however, has yet to be embraced by a large number of taxpayers on the whole. Osaka has received donations from only slightly more than 100 people. Some prefectures have not received any contribution yet.Nevertheless, Saga Gov. Yasushi Furukawa, a former central government bureaucrat, sees the scheme as a possible agent of change. "It may alter the way taxpayer money is distributed," Furukawa said.Minoru Matsuo, a 77-year-old factory owner in Tokyo, is one of the people who have donated money to Saga Prefecture under the program. "I wanted to express my feelings about Saga, my home province, in a concrete way," Matsuo said.Saga allows donors to select one of six options for how their money is used, including the preservation of a famous tourist spot and support for high school sports. Some taxpayers have offered their own ideas, such as establishing a satellite shop of Saga's local products in Tokyo.In our Internet survey of over 5,000 people, 3.7% of the respondents said they have already used or strongly wish to use the scheme. An additional 23.8% expressed interest.The hometown donation program may herald a new era when taxpayers demand more say over how their money is used.Earlier this month, Hiroko Suzuki, a 65-year-old woman from Sapporo, smiled happily next to a wind turbine as tall as 70 meters that had just been completed in the nearby Hokkaido city of Ishikari.The mammoth windmill is an investment vehicle offered by the Hokkaido Green Fund, a non-profit organization.The fund builds wind power generators with money collected from citizens and pays out profits from sales of electricity to the investors in the form of dividends.The fund has so far boasted an average annual yield of over 2%. But investors could lose all their money if the wind turbine in which they have invested breaks down.Despite the risk, the fund has already built 11 wind power systems nationwide. One of them attracted so much interest that the fund had to decline to receive money from over 1,000 would-be investors.Suzuki was happy about the 2 million yen she and her husband had sunk into the Ishikari turbine. "We have made an investment good for the environment," she said.In March, Daiwa Securities Group Inc. (8601) began selling "vaccine bonds" issued to fund the purchase of vaccines for children in poor countries. All the 23 billion yen worth of bonds offered were snapped up by individual investors in a week.The bonds, denominated in the South African rand, were issued by an international organization dedicated to supplying vaccines to developing countries. The body will repay bondholders using donations from major industrial countries.Some of the bond purchasers have said they sympathize with the social cause.Explaining the growing popularity of such social investments, Akio Makabe, an economics professor at Shinshu University, said these investment vehicles appeal to savings-oriented Japanese consumers because the risks and uses of the money are clear.All these facts may signal a new trend -- increasing interest among Japanese consumers in using their money for social good.(The Nikkei Friday morning edition)


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