As the year-end tax settlement season approaches, we naturally start going over what deduction items exist and whether there are any we might have missed. Not infrequently, this leads to situations where one expects a refund but ends up facing an unexpected tax burden. This is why many people think at least once of the ‘charitable contribution tax credit.’
From 2023, the ‘Hometown Love Donation System’ (Regional Love Donation System), which expanded the target of donations from individuals to regions, was introduced. It is a system that provides a tax credit benefit by donating to one’s hometown where one was born and raised, or to a region one personally wishes to support. The Hometown Love Donation System, operated with the purpose of revitalizing the local economy, connects individuals’ tax-saving choices to regional support. Now, roughly three years after implementation, is the Hometown Love Donation System being implemented as well as expected?
Amazing Changes Brought by Small Gestures
The Hometown Love Donation System has gained great popularity as a ‘cost-effective donation’ because, in addition to a full tax credit of up to KRW 100,000, donors can receive thank-you gifts such as local specialties or services from the relevant region within a certain range of the donation amount. In terms of numbers, the nationwide Hometown Love Donation fundraising amount in 2025 was KRW 150 billion, a 72% increase from the previous year, with the number of donations also increasing by 80%, showing clear quantitative growth.
Amid this trend, the Hometown Love Donation System is creating direct changes in the lives of local economies and residents. Gokseong-gun in Jeollanam-do used the Hometown Love Donation funds to open its only pediatrics clinic in the county, resolving a medical gap. In Cheongyang-gun, Chungcheongnam-do, participation from all across the country poured in for designated donations to support a specialized table tennis school, far surpassing the target amount.
[‘Pediatrics You See Every Day’ operated with Hometown Love Donation funds © Gokseong-gun]
The utility of the Hometown Love Donation System has also proven itself in crisis situations. In multiple local governments declared special disaster zones due to the large-scale wildfires in 2025, donations for recovery purposes proceeded rapidly through the system, with donation funds on the scale of tens of billions of won being utilized for disaster response and resident support. Going beyond a simple tax benefit, the Hometown Love Donation System functions as a system that sustains regions in both ordinary daily life and crisis situations.
[Table tennis team members of Jeongsan Elementary, Middle, and High Schools who raised competition fees through the Hometown Love Donation System © Cheongyang-gun]
Challenges Encountered Behind the Positive Changes
However, not everything has been smooth. As the system entered its third year of implementation, side effects have emerged in which competition over thank-you gifts among some local governments has overheated. Exploiting the fact that the gift display structure of the integrated Hometown Love Donation system ‘Hometown Love e-eum’ arranges items in ‘order of new registration,’ cases have arisen in which some local governments repeatedly register the same gift items or use automated tools to artificially boost their display ranking. An ‘exposure competition’ that is far removed from the system’s purpose has occurred.
Moreover, there are cases in which the actual donation amount does not even reach 0.1% of some local governments’ budgets, raising questions about whether the system’s original purpose is being sufficiently realized. For this reason, local governments are raising their voices that, in order to vitalize the Hometown Love Donation System, the tax credit limit should be expanded and corporate donations should also be permitted. There is an expectation that if corporate donations are allowed, a structure in which regions and companies grow together can be established through the inflow of corporate ESG funds.
[Screen showing items using macro systems pushing out new gifts and being displayed on the main page © Hometown Love e-eum]
Toward a System for Regional Sustainability
The goal that the Hometown Love Donation System should pursue is to resolve the pressing challenges of regions through donations and to mitigate fiscal disparities and the risk of extinction across regions. To this end, the discussion surrounding the system must also not remain at the level of ‘participation rates’ or ‘gift competition’ but expand to what public value the donation funds create for local communities.
When the system can clearly explain what policies and projects the donation funds led to, and what changes those results left in the lives of local residents, the credibility of the system will also rise. The next stage of the Hometown Love Donation System should be not to stop at maintaining the system but to become a long-term policy instrument that enhances regional sustainability and supports community restoration.
by Editor N