One hundred and seven refrigerators were delivered to the cramped alleyways of a low-income boarding-house neighborhood in Daein-dong, Gwangju. Just before the worst of the summer heat set in, 45 worn-out air conditioners were replaced with new ones. Neither would have been possible through the district office's regular budget. The money came from hometown donation funds sent to Gwangju's Dong-gu by donors in Seoul and Gyeonggi Province — strangers who had never set foot in the neighborhood. When they gave, they chose exactly where their money would go: a line item asking donors to protect energy-vulnerable residents from the heat.
Dong-gu crossed the 10 billion won ($7.45 million) mark in cumulative hometown donations in March — the first basic local government in the country to do so. Running a hometown donation platform and working with local governments across the country, I find myself fielding one question more than any other these days: "What on earth did Dong-gu do?" The bewilderment is understandable. Dong-gu is not a rural district. It has no mountains or coastline, no specialty product with national name recognition. It is an aging urban core in the middle of a metropolitan city — and it raised 10 billion won in just three years.
The short answer is that there was no secret. There was only preparation. From the very start of the system, Dong-gu studied Japan's furusato nozei hometown tax system, built a dedicated team, and designed its fundraising strategy with outside experts. The first year brought in just over 900 million won. The following year that figure rose to 2.4 billion won, and last year it reached 6.4 billion won. There was no lucky break in any of those years. The curve grew exactly as much as the preparation warranted.
Look more closely at what that preparation involved and the story gets more interesting. Where there were no specialty products, Dong-gu created them. Ten food vendors at Nam-Gwangju Market were designated as donor-gift suppliers, and those stalls generated 780 million won in new sales last year alone. The gift budget stopped being a cost and became an investment in the local street economy. The district also took a different approach to donors. Rather than treating a one-time contributor as a one-time contributor, staff kept in regular contact and built ongoing relationships. As a result, one in four Dong-gu donors opens their wallet again the following year. The district mayor personally visited the boarding-house rooms where refrigerators had been installed, checked that they were working, and shared tea with residents — an administration that proves with its own hands where the money went.
What deserves attention here is the structure in which practical benefit and moral purpose reinforce each other. Forty-two percent of Dong-gu's donations are designated gifts, meaning donors chose the specific cause themselves. A compelling purpose — helping boarding-house residents survive the summer — draws donations in; those donations flow through gift items to market vendors' sales and back into the local economy. Practical benefit without moral purpose does not last, and moral purpose without practical benefit never gains traction. Over three years, Dong-gu learned how to hold both inside a single policy system.
Dong-gu is not without its obstacles. Even the nation's top fundraiser cannot get past the full-deduction ceiling that causes 98 percent of donations to stop at 100,000 won. That is why Dong-gu has appeared at National Assembly forums multiple times to testify in favor of reform. That image, to my mind, captures what the next stage of this system looks like. Only a local government that has already done everything possible within the current rules — without waiting for a perfect system — has earned the standing and the evidence to ask that the rules be changed.
There are still those who dismiss the hometown donation scheme as little more than a gift-item competition or a fundraising gimmick. That concern is not lost on me. But the refrigerators in the boarding rooms of Daein-dong tell a different story. A local government that has built the right organization, accumulated the data, and cultivated trust with its donors can turn this system into a policy tool that moves welfare and the local economy forward together. Which city will be next to reach 10 billion won? Most likely, they will arrive in the order in which they prepared.
thlee@heraldcorp.com
