Ask John: Can Fans Donate to Anime Studios?

Question:
I was thinking since I know some anime have stopped production before or have been canceled do to financial problems. Would it be possible for a studio to, on their website as an example, open a fund for donations to continue development of an anime to completion or keep quality high? Do you think there would be a lot of fans willing to donate funds to do this? Also, if it is not possible, why not? Are there laws that prevent this from happening or would the amount donated be insignificant enough that it would be a waste of time?

Answer:
To put it simply, professional businesses seeking donations is widely considered unprofessional and a final resort of companies having nothing left to lose. Soliciting purchases or investment by offering merchandise, exclusive art, or accepting advance reservations for an upcoming product all provide some substantial, tangible return to the consumer. Strictly soliciting donations or consumer level sponsorship returns nothing in direct proportion to the investor. Private fans organized a “Save Ironcat” fund during the 2004 Anime Festival Orlando convention. The publisher still ceased printing operations in January 2005 and officially went out of business in 2006. The domestic licensing company Anime Midstream, which has yet to release any commercial products, has been accepting donations since December 2008. Fan opinion on this unusual circumstance has been mixed.

I don’t know enough about Japanese business law to know if donations to production studios are legal. Similar to America, I assume that grants and donations are acceptable, but are subject to taxation and strict accounting and reporting laws. Speaking from my limited business experience, I think there are two reasons why professional companies would rather make due with underfunded budgets rather than accept public support. Accepting grants from private individuals may destabilize the company’s professional standing and relationships. And donations given without a material return are unlikely to total an amount significant enough to offset the intangible harm they cause.

Professional companies aren’t independent islands. They have to work with and purchase goods and services from other companies in order to effectively operate. Just as you would be naturally cautious to lend money to an associate whom you know is having financial troubles, businesses may be wary of doing business with, or entering into contracts with a company known to be on unstable financial footing. Maintaining the appearance of healthy business operation may be more important and valuable to long term sustainability than collecting a small immediate cash infusion. And cash donations from consumers probably are typically rather small. As of 2005 the Japan External Trade Organization reported that typical anime TV episodes cost 5 to 10 million yen to produce. Unverified reports place the cost of an episode of One Piece at ten million yen (approx. $109,000 USD). AIC’s 2007 Bamboo Blade TV anime had a 9.5 million yen per episode budget. When an average single anime episode costs $100,000 to produce, I simply can’t envision private individuals donating enough money to a production studio to significantly improve production quality over a span of episodes or even produce additional episodes. Maintaining a professional reputation and appearance is undoubtedly more valuable than the few thousand dollars, at most, that could be brought in from private donations.