Nihonto (日本刀), the Furusato Tax, and Crowdfunding—Contemporary Fundraising Supporting Traditional Craftsmanship

Furusato Nozei and the Japanese Sword Industry

Japanese swords have been highly regarded as traditional crafts for their overwhelming beauty and historical value. However, in recent years, the sword industry has faced a dual challenge of severe successor shortage and financial difficulties. In such circumstances, modern fundraising mechanisms called "furusato nozei" (hometown tax) and "crowdfunding" are bringing fresh momentum to the sword industry.

Under the furusato nozei system, sword-related return gifts have maintained steady demand. Iaido swords, replica swords, and replica sword fittings crafted by sword smiths have been offered, but in recent years, "experience-type" return gifts such as authentic sword smith works and sword forging experiences and tours have begun to garner attention. In Okuizumo Town, Shimane Prefecture, in collaboration with Nittoho Tatara (a tatara iron smelting facility operated by the Japan Art Sword Preservation Association), a sword fitting creation experience using tamahagane has been offered as a return gift, attracting interest from across the country.

New Possibilities Opened by Crowdfunding

Crowdfunding is increasingly functioning as a more direct fundraising method for the sword industry. Sword craftsmen, who once had to rely on support from wealthy collectors and industry insiders, now have a path to gather funding broadly from general supporters through the Internet.

As a representative example, there is a case where a young sword smith raised funds for a sword forging workshop expansion through crowdfunding. Against a target of 3 million yen, support eventually exceeded 5 million yen. Most supporters were fans of Touken Ranbu or general citizens interested in traditional crafts, a new demographic that the sword industry had previously not engaged with. In return, video distribution of the creation process, opportunities for workshop tours, and custom-made small swords with names were offered.

Industry Transformation Brought by Diversified Fundraising

The spread of furusato nozei and crowdfunding is fundamentally changing the fundraising structure of the sword industry.

• Cultivating New Customer Segments: Traditional Japanese swords are high-priced products, so customers who can purchase them are limited. However, crowdfunding allows people to participate in sword smiths' activities with support ranging from thousands to tens of thousands of yen, functioning as an entry point to capture what might be called "prospective sword enthusiasts." There is also high potential for such supporters to develop into future paying customers.
• Strengthening Partnerships with Local Governments: Municipalities that have organized sword-related return gifts through furusato nozei are deepening their relationships with local sword craftsmen, and there are increasing cases of expanding subsidies for successor development support and workshop equipment investment. In Seki City, Gifu Prefecture, return gifts combining sword smith workshop tours with sword forging experiences have become popular, creating synergistic effects with regional tourism.
• Improved Information Dissemination: Crowdfunding project pages serve as venues for detailed introduction of sword smiths' techniques and philosophy, and often become opportunities for media coverage. Successful projects are shared on SNS, providing opportunities for overseas Japanese sword enthusiasts to take notice.

Learning from Success Stories and Failures

There are several important points for successfully implementing furusato nozei or crowdfunding.

Points for Success

• The Power of Storytelling: Simply saying "I make swords" lacks persuasive power. By sharing the sword smith's background, relationship with their master, and specific vision of what kind of swords they aim to create, supporters are more likely to feel empathy.
• Return Gift Design: Experience and information-type return gifts, not just physical items, such as workshop tours, live streaming of sword forging, and progress reports on creation, appeal to those who cannot commit to purchasing expensive swords.

Points to Learn from Failure

• Target Amount Setting Errors: On platforms that adopt the all-or-nothing method (full refund if target is not met), setting the target amount too high results in failure.
• Lack of Continuous Information Dissemination: Neglecting continuous information sharing after project completion can also cause supporters to withdraw.

Application to International Expansion—The Potential of English-Language Crowdfunding

Attention is also being paid to fundraising for overseas markets using English-language platforms (such as Kickstarter and Indiegogo), not limited to the domestic market. Japanese swords have high international recognition, with particularly enthusiastic collectors in North America and Europe. However, it is necessary to overcome challenges such as language barriers and export regulations (including deregistration certificates and obtaining Ministry of Economy, Trade and Industry export approval).

In cases where a YouTube channel was established to disseminate sword smith activities in English, a community was built with overseas fans, and crowdfunding was conducted, there are reports of cases where approximately 40% of supporters were from overseas.

Future Outlook

Furusato nozei and crowdfunding are bringing about the "democratization" of fundraising in the Japanese sword industry. By actively utilizing new mechanisms across the industry, there is potential to secure the resources to address medium and long-term challenges such as investment in successor development, equipment modernization, and overseas market development.

Japanese swords are transitioning from an art form where only those who can afford them can engage with them to a cultural heritage where anyone can participate through support. This transformation has important implications for considering the sustainability of Japanese swords as traditional crafts.