This bonfire in the shrine is for burning the old protective charms and talismans which shelf life is only one year. Those talismans are so dirty with evil powers after driving out the calamities for a year.
I’ll explain the powers of local gods. Those gods have powers to drive off the other evil spirits powers against believer and to transfer the bad energy to the talisman goods. The goods would be contaminated with bad energy like radioactivity. Japanese gods and goddesses are good merchants. They wouldn’t give to the believers the goods keeping protective power for over one year. If human keeps the goods over one year, the dirty energy on the goods would start effecting badly to the owners. The man or woman can only burn the goods with the source of evilness in the shrine where they got them. And the believers freshly buy the new talisman goods. It’s a great business for gods, isn’t it?
But people believes : the believers would be saved without fail. And also visit I a shrine in the new year week. I can’t afford the goods. So I only pray for myself to spend my life without any calamity for one year….or more if possible.
And I donate one coin. The value of the coin would change as mach as I have in my pocket. One year 5 hundred yen and the other year only 5 yen. The gods can’t refuse to accept my donation. If they once accept my coin, they must protect me for one year. It’s the rule between gods and human , haha.