Japan’s Super-Aging Society and the Potential of Bequests
In Japan, there are around 120 million people, and 40% are aged 50 and over. The approximate amount of wealth transfer is $428 to $500 billion USD (60 to 70 trillion JPY) by the late 2030s. Japan is facing a super-aging society at this stage.
1 USD = 140 JPY
According to data regarding the number of bequests and amounts for tax deductions on donations through bequests, which were disclosed through requests to the National Tax Agency Japan, the total amount of bequest donations in 2020 was approximately $283.57 million USD (39.7 billion JPY), compared to $54.28 million USD (7.6 billion JPY) in 2014.
The number of cases was 826, more than double the 397 cases in 2014. While the amount varies by year, it has steadily increased.
In addition, the White Paper on Legacy Giving, published by Will for Japan in 2024, revealed that many people are considering gifts in wills, although the sector still needs to raise awareness.
Source: White Paper on Legacy Giving, 2024, Will for Japan
In recent years, there has been an increase in nonprofit organizations investing in bequests. The following paragraphs introduce their practices.
Methods Practiced by Recipient Organizations in Japan
So, how do Japanese fundraisers and organizations ask for gifts in wills?
Approaches for Existing Donors
There are methods of regularly providing information about legacy donations to existing donors, such as through surveys, newsletters, and seminars.
Some Japanese organizations conduct donor surveys that include a few questions about interest in legacy giving, similar to many organizations in other countries.
Additionally, several organizations hold seminars to raise awareness of gifts in wills.
From donors’ perspectives, if the purpose is to obtain neutral information on topics of personal interest, such as "end-of-life planning," "inheritance," or "wills," these touchpoints make it easier for them to participate.
Moreover, adding a section on legacy giving in newsletters—such as "messages from bequest donors" or "useful tips on writing wills and legal procedures"—is also practical.
For example, Médecins Sans Frontières Japan included a section in their donor newsletter, "ACT!", introducing topics such as tax benefits and how to write a will, along with illustrations.
The source is ACT! October 2023 issue, ACT! 2023年10月号 スーダン危機 避難を強いられた人びとへ医療を in Japanese.
Similarly, Plan International Japan includes flyers about the "PLAN Legacy 1% Club" in their newsletters. The club invites members who intend to donate 1% of their estates and provides information on bequests.
Approaches for Potential Donors
Various efforts are being made to find new donors.
The 2023 Legacy Giving Survey for Recipient Organizations, conducted by Fundrex and the Japan Legacy Gift Association, indicated that effective media and channels, especially in terms of increasing inquiries, were "advertising in newspapers and magazines" and "introductions by professionals such as legal experts and financial institutions."
Source: 2023 Legacy Giving Survey for Recipient Organizations, Fundrex, and the Japan Legacy Gift Association
Even if individuals have had no connection with nonprofit organizations, it is becoming important to make the organization known as a potential recipient.
From the perspective of directly approaching elderly individuals who are considering legacy giving, using advertisements in various media is the most common approach.
For example, advertisements appear in current affairs magazines like Bungeishunju or Shukan Shincho, or in newspapers like The Asahi Shimbun or The Nikkei Shimbun.
When readers interested in legacy giving request materials, information from each organization is sent individually.
Afterward, the organization communicates with prospective donors via email or phone.
The 2023 Legacy Giving Survey for Recipient Organizations also shows that referrals from financial institutions, legal professionals, or intermediary organizations are a significant channel in Japan.
In some cases, financial institutions, such as private banks or trust services, as well as legal professionals, including lawyers and tax accountants, receive inquiries about bequests. They often assist by requesting materials or making inquiries on behalf of their clients to nonprofit organizations.
Current Movement in Japan’s Nonprofit Sector
The Ministry of Health, Labour and Welfare announced that the average life expectancy as of 2022 was 81.05 years for men and 87.09 years for women, continuing Japan's trend toward one of the highest life expectancies in the world.
The White Paper on Legacy Giving by Will for Japan in 2024 states that, with the declining birthrate and aging population, the uneven distribution of assets among the elderly generation is becoming more pronounced in Japan.
While there has been an increase in nonprofits focusing on bequests, national organizations have recently been promoting legacy giving.
For instance, the the Japan Legacy Gift Association, founded in 2016, holds Japan's Legacy Week every September.
Will for Japan, established in 2019, organizes the Free Wills Campaign, which provides grants to legal professionals involved in writing wills that include charitable gifts.
Conclusion
In conclusion, Japan is experiencing a significant demographic shift towards a super-aging society, with an increasing number of people considering charitable bequests in their wills. Nonprofit organizations are investing more in legacy giving by engaging both existing and potential donors through various channels, such as newsletters, seminars, and advertisements in major media outlets. The growing interest is reflected in a steady rise in the number and amount of bequest donations.
However, cultural sensitivities around the topic of death and concerns about transparency in the use of donations remain barriers. National organizations are actively promoting legacy giving through various initiatives.
Acknowledgments: Special thanks to Tomohisa Hosogai for his valuable contributions to the development of this article.
