Dormant Deposits for Social Issues

Japan has been confronting many social issues such as child poverty, isolation, or deterioration of local communities. Non-profit organizations and the private sector are working to address social issues, but most of them are facing chronic shortage of money and staff. A new initiative was started in 2019, utilising dormant bank deposits for providing support to address social issues to which the national and local governments cannot respond one by one.

Innovation Summary

Innovation Overview

With the extensive ageing of the population, social issues are getting more complex and diverse in Japan, including those concerning isolation from society, child poverty, abuse, and so on. The national and local governments are taking measures to address these issues. To approach people who need assistance facing social issues, it is often the case that public policy measures by governments, which always have to ensure fairness and uniformity, face difficulties in providing proper responses to all issues one by one. Various non-profit organisations are working on the social issues beyond administrative restrictions. However, in Japan, it is also often the case that many non-profit organisations are facing chronic shortages of money and staff.

In 2019, the Japanese government launched a new initiative to provide grants derived from dormant bank deposits to many private organisations working on solving social issues. Every year, it is estimated that dormant bank deposits unclaimed for more than 10 years generate approximately 120 billion Japanese Yen. On average, 50 billion out of 120 billion yen is reclaimed by original owners of bank deposits, and 70 billion remain unclaimed. The new initiative utilises a part of the unclaimed deposits for supporting vulnerable people and communities through providing grants to organisations working on certain social activities.

The new government Act stipulates three fields of activities covered by the initiative as follows:
i) activities to support children and young people
ii) activities to support people who are economically, socially disadvantaged and people with disabilities
iii) activities to support communities facing declining vitality or other social difficulties.

The Cabinet Office designated JANPIA to distribute funds to intermediate support organisations (“Intermediaries” hereafter). It publicly seeks Intermediaries that distribute funds to organizations to solve specific social issues set by Intermediaries within three fields.

In November 2019, JANPIA announced it selected 22 organisations as the first Intermediaries for 2019. to distribute approx. 3 billion yen for three years. Each organisation makes an agreement with JANPIA about what type of social activities it supports, in which area, for how long and how much it distributes to organisations. The projects selected vary widely within the three fields, for example,
-to support organisations upbringing operational capacity of “cafeteria for kids”: 119 million yen to be granted in total for 3 years
-to support organisations to support kids and youth with foreign origin: 248 million yen
-to support peer-support activities for those who are feeling difficulties in lives: 77 million yen
-to support activities for cancer patients to help finding jobs, or young patients supports: 116 million yen
-to support activities toward narrowing income disparities in the Chugoku area: 105 million yen etc.

Each of the Intermediaries calls for and selects the organisations carrying out activities to submit a detailed plan describing how they operate and how they measure their outcomes. JANPIA supports Intermediaries not just by providing funds to them, but also cultivating human resources. In Japan, non-profit organisations working on social issues face lack of managerial capacities. It accompanies each Intermediary by providing frequent dialogue and tutorials. All the Intermediaries then accompany each organisation they selected to carry out activities not just through grants but also by providing frequent dialogues towards better management and accountability.

An new intensive training course for the programme officers of Intermediaries was developed and provided. It is expected to have significant impact on the Japanese social sector by building capacity and capability. Through these processes, it is expected that a new scheme for utilising dormant deposits for social issues should lead to improvements in the lives of vulnerable people and communities.

The mechanism to utilise dormant assets unclaimed has been seen in many countries around the world for a long time. Some countries use such assets to replenish their national or state revenues. The number of countries and regions that utilise such assets for social issues is limited. Japan held an international symposium in May 2019 with participation of the UK, Ireland, British Columbia Canada and the UN. The Minister of Japan at the time mentioned in his closing speech, “national and local governments, international organisations, private companies and NPOs are seriously required to work together to solve social issues through utilising diverse funds, human resources and expertise”. The Cabinet Office will try every effort to support operations of this new initiative and to disseminate globally this innovative way of funding for utilising dormant assets for social issues.

Innovation Description

Innovation Development

Innovation Reflections

  1. Update from the one who submitted this case study.

    Faced with increasing need to support vulnerable people under COVID-19 crisis, the government decided to provide more grants to activities tackling for social issues by utilizing dormant deposits in 2020.

    Since its launch of the initiative in 2019, more than 80 Intermediaries have received grants from JANPIA, and over 500 projects have or will have started with them. Each project is planned, applied, and provided by private organization tackling for social issues. The cumulative amount of grants since the beginning will reach about 19 billion yen in FY 2021.

    The social issues that 500 projects handles varies widely within three areas under the Act. Just a few examples of 500 projects are as below;
    -A social enterprise in Hokkaido provides exercise classes at an easy rate for kids, adults, and senior adults in one place, with expecting to create a community there. The enterprise plans to expand operations with grants from dormant deposits, and to deploy services widely through gaining investments after grant period.
    -One non-profit organization in Kanagawa refurbished abandoned home to provide it as a gathering place for ones with development difficulty and their families. The organization utilizes grants for providing them many occasions such as cafeteria, cooking or programming class and so on.

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Year: 2019
Level of government: National/Federal government

Status:

  • Implementation - making the innovation happen

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