Japan NGO Sector

Brief History of Non Profit Organization Law in Japan

“Article 34 of Civil Code” and “Law to Promote Specified Nonprofit Activities” Article 34 of Civil Code 0f1896 was the very first law for non profit organizations. Under this law, qualified organizations for Public Interest Legal Persons (PILPs also known as Koeki Hojin) are recognized as public benefit judicial bodies and also entitled to receive tax privileges from state. However, in order to register as PILPs, the organization must have significant revenues and capital: the organization must establish having a minimum 300 million yen ($2.5 million) in funds and at least minimum 30 million yen ($ 0.25 million) for annual operating budget . Besides these strict financial requirements, Article 34 of Civil Code also lists various qualifications that many start-up voluntary organizations or charities may not meet. In addition to those hurdles, in order to be PILPs, organization needs to pass the permitting system given by the government permitting ministry. If the organization’s objectives differ from the permitting ministry’s objects, it is also hard to gain PILP status . For these reasons, many charitable organizations have operated without recognition as public benefit judicial bodies by the Japanese government. The state registration for organizations has and continues to pose difficulties for small grassroots organizations to launch or expand their volunteer activities. Without official recognition by the state, they are unable to rent office space, open a bank account, and not able to receive tax deductions as a public benefit judicial body . After the great Hanshin-Awaji Earthquake in January 1995, grassroots volunteer activities in Japan experienced a momentum and rapid growth. In the aftermath of disaster, Japanese bureaucratic civil service system was not able to respond to the disaster and provide relief effort early enough. On the other hand, volunteer groups reacted promptly to the massive disaster and provided enormous assistance. Two months after the disaster, more than 1.2 million volunteers went to the area to support victims and approximately $160 billion US dollars in donation flew in to the disaster area. Many of those volunteer groups are not PILPs but rather individuals or grassroots volunteer groups without legal recognition . This remarkable response of volunteer groups was recognized in the society through the media and after three years of intense lobbying, the Japanese government reconsidered its legal system to form civil society. In 1998, the Japanese government passed a new law that supports those volunteers groups to have legal status to operate their activities: The NPOs, the Law to Promote Specified Nonprofit Activities, also known as the NPO Law . The NPO Law was created to enhance the volunteer activities scope and activities of voluntary organizations. The NPO law states: “the purpose of this law is to promote the sound development of specified nonprofit activities in the form of volunteer and other activities freely performed by citizens to benefit society, through such measures as the provision of corporate status to organizations that undertake specified nonprofit a activities, and thereby to contribute to advancement of the public welfare” (Article 1 of Law to Promote Specified Nonprofit Activities). Furthermore, through the NPO Law, these grassroots volunteer organizations gained not only legal status to operate their activities but also established legitimacy in the society. Types of NPO in Japan There are two major types of NPOs in Japan that are legally recognized and receive special tax privileges: (1) Koueki Hojin, Public Interest Legal Persons (PILPs) and (2) Tokutei Hieiri Katsudo Hojin, or Specified Nonprofit Corporations (SNCs). Within various types of PILPs, there are only two categories of PILPs can operate volunteer activities; foundations (Zaidan Hojin) and association (Sandan Hojin). An association is formed by its members; and receive funding from the members. Foundations, on the other hand, do not have members; rather a set of funds which are used according to the foundation’s suggested purposes. The designation of Tokuei Hieriri Katudo Hojin (Specified Nonprofit Corporations (SNCs), az created by the NPO Law of 1998. To be qualified as a SNC, the organization is required to the following conditions;

• Organization’s activities must fulfill at least one of 17 activities categories which is listed Schedule of Article 2* (See List 1: Attached Schedule (Article 2))
• Organization that is covered by both of the following items and is not for the purpose of generating profits;
• Provisions regarding acquisitions and loss of qualifications for membership are not unreasonable;
• Number of officers receiving remuneration total no more than one-third of the total number of officers;
• Activities are not for the purpose of propagating religious teachings, performing ceremonies, or education or fostering believers;
• Activities are not for the purpose of promoting, supporting, or opposing a political principle;
• Activities are not for the purpose of recommending, supporting, or opposing a candidate for a public office;
• Organization must have at least 10 members

Further amendments on Article 34 of Civil Code and Japanese NPO Law No major amendments have been made to Article 34 of Civil Code since its inception. However, as a response to a number of corruption scandals of PILPs (koeki hojin), in 2000, the Japanese government engaged a campaign following the evaluation of 7,000 PILPs. Then, the government drafted for major amendments of Article 34 of Civil. In June 2006, major amendments were made to Article 34 of Civil Code, these changes will take effect in 2008. Distinguishing NGOs from NPOs There are no laws recognizing NGOs as distinct from NPOs in Japan. The Japanese NGO Center for International Cooperation (JANIC), for example, is one of the most prominent Japanese NGOs that focuses on international development and networking NGOs in Japan. However, JANIC is only recognized by Japanese law as a SNC. The Japanese branch of the well known NGO, Medicines Sans Frontieres/Doctors without Boarders, is also recognized as a SNC. Number of Nonprofits PILPs (Koueji hojin) Table I shows the number of PILPs (Associations and Foundations) in Japan as of October, 2005. Table I: Public Interest Legal Persons (PILPs) in Japan Type of PILPs National Level Local Level Total Association 3,710 9,080 12,677 Foundation 3,131 9,495 12,586 Total 6,841 18,803 25,263 Source: Japan Association of Charitable Organization http://www.kohokyo.or.jp/non-profit/hojin/koeki/outlook.html Since the NPO Law was passed inb 1998, the total number of PILPs has been decreased. Whereas, in 1998, there were 26,380 PILPs in Japan , there were 25,263 in 2005.

Table II: Change in Public Interest Legal Persons (PILPs) in Japan

Source: Ministry Internal Affairs and Communications. 2006 White paper http://www.soumu.go.jp/s-news/2006/pdf/060815_1_si033-090.pdf

SNCs (Tokutei hieiri katsudou hojin) As of June, 2006, there are 27,414 SNCs registered in Japan. The below table provides a break down of the distribution of nonprofit organizations according to activity area.

Activity Number Description of Activity Number of SNPs

(n) Percentage %

1 Promotion of health, medical treatment, or welfare 15751 57.5 2 Promotion of social education 12801 46.7 3 Promotion of community development 11069 40.4 4 Promotion of science, culture, the arts, or sports 8851 32.3 5 Conservation of the environment 7807 28.5 6 Disaster relief 1838 6.7 7 Promotion community safety 2606 9.5 8 Protection of human rights or promotion of peace 4208 15.3 9 International cooperation 5666 20.7 10 promotion of a society with equal gender participation 2421 8.8 11 Sound nurturing of youth 10938 39.9 12 Development of information technology 2092 7.6 13 Promotion of science and technology 1055 3.8 14 Promotion of economic activities 2902 10.6 15 Development of vocational expertise or expansion of employment opportunities 3738 13.6 16 Protection of consumers 1308 4.8 17 Administration of organization that engage in the above activities or provision of liaison, advice, or assistance in connection with the advice, or assistance in connection with above activities 12320 44.9 Source: Cabinet Office of Japan, NPO Homepage: http://www.npo-homepage.go.jp/data/bunnya.html Note: Because some organizations include multiple activities, the total percentage will not sum up to 100 percent.

Growth of Specified Nonprofit Corporations (SNCs) in Japan since 1999 Since 1999, Japan has seen growth in SNCs. At the end of September 1999, only 682 SNCs were registered and recognized by the Japanese government. However, by the end of June 2006, numbers of specified nonprofit corporations in Japan nearly quadrupled to 27,000. Table III provides details of this exponential growth of SNCs in Japan since 1999.

Table III: Growth of SNCs in Japan since 1999

Source: Cabinet Office of Japan, NPO Homepage: http://www.npo-homepage.go.jp/data/b_history.txt

Growth of International SNCs in Japan since 1999 Table IV show the growth SNCs work on international corporations, and protection of human rights and promotion of peace. In September 1999, there were only194 international SNCs which work on International Corporations. However, by June 2006, there are 5,665 international SNCs registered in Japan.

Table IV: Growth of International SNCs in Japan since 1999

Source: Cabinet Office of Japan, NPO Homepage: http://www.npo-homepage.go.jp/data/b_history.txt

• List 1: Attached Schedule (Article 2)

17 Categories of Activities

1. Promotion of health, medical treatment, or welfare
2. Promotion of social education
3. Promotion of community development
4. Promotion of science, cultured, the arts, or sport
5. Conservation of the environment
6. Disaster relief
7. Promotion of community safety
8. Protection of human rights or promotion of peace
9. International cooperation
10. Promotion of a society with equal gender participation
11. Sound nurturing of youth
12. Development of information technology
13. Promotion of science and technology
14. Promotion of economic activities
15. Development of vocational expertise or expansion of employment opportunities
16. Protection of consumers
17. Administration of organization that engage in the above activities or provision of liaison, advice, or assistance in connection with the advice, or assistance in connection with above activities

References

• Cabinet Office of Japan, NPO Homepage:
• Cabinet Office of Japan 2000 White Paper on the National Lifestyle Fiscal Year 2000(Summary)
• Gilson, Julie. 2003 Japan’s pursuit of human security: humanitarian agenda or political pragmatism? Japan Forum 15(2): 193-207.
• Japan Association of Charitable Organization (JACO) 2006. Koeki Hojin (Zaidan hojin and shadan hojin)
• Law to Promote Specified Nonprofit Activities (Unofficial Translation)
• Ministry Internal Affairs and Communications 2006 White paper
• Pekkanen, Robert. 2000 Japan’s New Politics: Case of NPO Law. Journal of Japanese Studies, 26 (1): 111-148.
• Takao, Yasuo. 2001. The Rise of the “Third Sector” in Japan. Asian Survey. 41(2): 290-209
• U.S. International Grantmaking. 2006. Country Information: Japan

External Link Japanese NPO/NGO information links

• Japan NPO Center
• NGO Network Japan *Translation to English is available at Japanese site
• NPO Home Page – Japanese government’s NPO information page *In Japanese Only
• The Ministry of Foreign Affairs of Japan: Partnership with Japanese NGOs under ODA

Major Japanese NPOs working on International Developments Public Interest Legal Persons (PILPs) Foundation (Zaidan hojin)

• Association for Promotion of International Cooperation*In Japanese Only
• Foundation for International Development/Relief (FIDR)
• International Develop Center of Japan
• International Friendship Foundation (IFF)　
• Japan Center for International Exchange (JCIE)
• Japan International Medical Technology Foundation (JIMTEF)
• OISCA
• The Foundation for Advanced Studies on International Development (FASID)

Association (Shadan hojin)

• Association for Aid and Relief, Japan (AAR Japan)
• Association for Japanese-Language Teaching (AJALT)
• National Federation of UNESCO Associations in Japan (NFUAJ)

Specified Nonprofit Corporations (SNCs)　

• ADRA*In Japanese Only
• Japan International Volunteer Center (JVC)
• Japanese NGO Center for International Cooperation (JANIC)
• JEN
• Medicines Sans Frontieres Japon *In Japanese Only
• Peace Winds Japan
• SHAPALA NEER “Citizens’ Committee in Japan for Overseas Support”
• World Vision Japan