Introduction of Japan's First Donor-Advised Fund Using Trusts for Educational Support

Introduction to Japan's First Donor-Advised Fund

In a significant advancement for educational funding in Japan, Hogaraka Trust and Commons Japan have announced the approval of a groundbreaking donor-advised fund (DAF) through a public trust. This initiative, titled "Children's Future and Education Support Public Trust," received authorization from the Cabinet Office on June 29, 2026, making it the first general public trust approved following reforms to the Public Trust Act.

Overview of the Public Trust

The primary goal of this public trust is to enhance educational opportunities and promote research in the educational sector. Aqua Corporation, the trustee, will provide grants aimed at nurturing talents for the future of Japan. This initiative is part of Aqua's commitment to give back to the community through social contribution activities. Importantly, this fund allows for donations from individuals and corporations beyond Aqua, creating a nationwide scheme focused on educational support.

Grant Programs Offered

The fund will support various educational projects, with the first round of grants expected to be distributed between January and March 2027, following a public call for proposals and a thorough review process. The grant initiatives are tailored to support activities from:
1. Kindergartens, elementary schools, middle schools, high schools, special education schools, and their governing bodies as defined by the School Education Act.
2. Universities and technical colleges involved in educational and research activities as specified by the School Education Act.
3. Non-profit organizations and individual researchers focused on enhancing educational support, research, and learning opportunities.

Joint Management of the Trust

Hogaraka Trust and Commons Japan will jointly manage the public trust. Hogaraka Trust will primarily handle the management of trust assets, while Commons Japan will oversee the public announcement of grant opportunities, candidate evaluations, the operation of the managing committee, grant execution, and monitoring of outcomes and impact.

Initial Trust Amount and Philanthropic Features

The initial trust amount contributed by Aqua is ¥5 million. The corporation aims to continue adding funds and encourages contributions from various entities to expand the trust assets to a scale of ¥10 billion. One of the unique features of this trust is its DAF scheme, which allows donors to communicate their intentions regarding the usage of donations and the areas in which they hope to make an impact.

Furthermore, trust assets will be managed through investment vehicles, ensuring growth and sustainability. Recent tax reforms have aligned tax benefits with public trust status, granting significant tax deductions for contributors, thereby enhancing the appeal of the program.

Future Actions

Hogaraka Trust and Commons Japan plan to work closely with various non-profit organizations and community stakeholders to tackle social issues and establish a cycle of social and economic value. They view the public trust as pivotal in connecting private funds to social challenges and enhancing sustainability within the community. The revised legal framework also allows for greater flexibility in managing public trusts, encouraging participation from diverse actors in philanthropic activities.

Moreover, they intend to improve the marketability of the trust while actively promoting awareness of the system to facilitate its widespread adoption.

Reference

The donor-advised fund (DAF) model originated in the United States, where it has become a prevalent means of charitable giving. By 2024, the total assets in DAFs in the U.S. are anticipated to reach approximately $327.8 billion.

Contact for More Information

Hogaraka Trust Co., Ltd.
Address: 9th Floor, Kojimachi Crystal City, 4-8 Kojimachi, Chiyoda, Tokyo
Contact Person: Arao, Komatsubara
Email: [email protected], [email protected]
Phone: 03-3511-5695

Commons Japan Co., Ltd.
Address: 10th Floor, Urban Net Nihonbashi 2-1-3, Chuo, Tokyo
Contact Person: Mizutani
Email: [email protected]
Phone: 050-5358-4498