Citizen fund investments

More and more people are investing their money in citizens' funds. People can invest a small amount of money to help organizations that are tackling issues close to people, such as community building, nursing care support for the elderly and care of children after school classes are over.

Especially since the March 11 earthquake and tsunami, citizens' funds have helped to prop up enterprises and to promote green energy development in the disaster-hit areas.

In the public sector, even when budgets are passed by the Diet or local assemblies, it is difficult for the central and local governments to act quickly. They have to clear legal provisions, and a lot of administrative documents must be prepared.

For example, the work to remove debris from the devastated areas has not gone smoothly. Even the Japan Red Cross Society is slow in delivering support money contributed by people to local residents who have suffered from the disasters and the Fukushima nuclear crisis.

In contrast, citizens' funds can effect prompt action. It does not take a lot of time to set up such funds, collect money from citizens and begin operations. Those interested in helping enterprises struck by the disasters can request explanations from them about their history, activities, determination and how funds will be operated. They can also get such information through the Internet.

Enterprises such as restaurants, fish stores, fish cake makers and soy sauce makers have established their own funds to collect investments from citizens so that they can reconstruct themselves financially and resume business operations.

Such funds first started in and around Kesennuma, Miyagi Prefecture, and spread to Iwate Prefecture. They were able to start collecting investments within a month after they were established. Investors put up money ranging from several tens thousands of yen to around ¥100,000.

Even if only several thousand people take part, the amount invested can become surprisingly large.

If enterprises helped by such funds make profits, the invested money will be returned. Investors may also be able to get some perks. But if enterprises cannot make profits, the invested money will not be returned.

Citizens' funds can play a meaningful role. But investors must watch whether funds are operated properly. It is hoped that such funds will help strengthen civil society.

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