How Regular Donors Stabilize Nonprofit Revenue in Japan
A regular giving system for supporting nonprofit activities allows people to make ongoing donations of a fixed amount, such as 7.14 USD (1,000 JPY), 14.28 USD (2,000 JPY), or more than 71.4 USD (10,000 JPY) every month.
1 USD = 140 JPY.
In Japan, this type of donor is commonly called a “Monthly Supporter.”
Various Japanese organizations have made significant efforts to promote regular giving.
Based on the financial information for FY 2023, UNICEF Japan had 177 million USD (25.4 billion JPY) in donation revenue, with 83% coming from individual giving. Furthermore, 83.7 million USD (12.02 billion JPY), almost half of the individual donation revenue, was from regular giving.
Additionally, major NGOs like Médecins Sans Frontières, UNHCR Japan, and Plan International Japan have significantly contributed to the overall increase in regular giving in Japan.
Unique Tendencies of Regular Giving in Japan
While fundraising methods in Japan are similar to those in other countries, there are several unique tendencies associated with regular giving.
High Retention Rate
Compared to other countries, Japan tends to have a higher retention rate, ranging from 80% to 95%.
Although the exact reasons for this are unclear, Japan’s cultural characteristics may play a role.
Maintaining a high retention rate is essential for making regular giving a stable source of revenue. Lifetime Value (LTV) is also a key metric in Japan.
How to Acquire New Donors
In other countries, the process of acquiring new regular donors through digital channels often involves two steps: acquiring leads through advertisements and then following up via phone or email to convert them into donors.
However, in Japan, a common method for onboarding monthly supporters involves a one-step process, leading potential donors from video or article advertisements directly to a landing page with a donation form.
In digital fundraising, the use of digital ads is increasing, and it is possible to convert potential donors into regular donors with this simplified approach.
This method is becoming common both in Japan and internationally.
Storytelling is also effective in acquiring new monthly supporters in Japan’s nonprofit sector.
Growing Donor Bases for Japanese Nonprofits
Some Japanese nonprofit organizations have achieved over 10,000 monthly supporters.
The availability of PR resources significantly influences the approaches taken by organizations.
If nonprofits wish to reduce upfront investment, they can gather monthly supporters solely through free methods such as social media or events, without spending on advertising.
However, relying solely on free strategies makes it difficult to achieve large-scale growth, such as gaining "over 1,000 supporters annually," unless special conditions are met.
On the other hand, if your organization has an annual project scale of 100 million JPY or 200 million JPY or more, and sufficient financial resources to invest, it may be worth considering an investment to achieve short-term growth.
A few years ago, most organizations running ads were large international NGOs with Japanese branches. Recently, however, more domestic nonprofits have been using digital advertising to accelerate growth, with some gaining over 10,000 monthly supporters.
How to Start or Enhance Regular Giving
While face-to-face donation requests remain important in Japan, individual donation requests through social media and email have become more common as a fundamental approach.
To expand fundraising more broadly, some organizations are utilizing digital marketing through free publicity channels like social media.
Being featured in mass media, such as TV commercials or programs, is also an effective way to reach a wider audience.
To attract interest from a broader market, identifying social issues that resonate with the general public and aligning fundraising efforts with causes that elicit empathy is crucial.
Factors such as public awareness of the social issue, the characteristics of beneficiaries, and how closely nonprofit activities align with donors' expectations and intentions can significantly influence the success and impact of regular giving campaigns.
Conclusion
In conclusion, regular donors, or “Monthly Supporters,” play a crucial role in stabilizing Japan’s nonprofit sector. Their ongoing contributions not only ensure consistent revenue streams but also enable nonprofits to plan long-term initiatives and respond more effectively to the needs of their beneficiaries. As nonprofits continue to explore digital marketing and media strategies, maintaining high retention rates and acquiring new donors remains vital. Ultimately, the success of these organizations depends on the strength of their relationships with regular donors, who serve as the backbone of their sustainability and impact.
Acknowledgments: Special thanks to Tomohisa Hosogai for his valuable contributions to the development of this article.
