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When the Nature Conservancy’s Lori Forman addressed the College Women’s Association of Japan at a luncheon earlier this year, the topic was supposed to be nongovernmental organizations in Japan. But instead of providing a nuanced description of Japan’s not-for-profit movement, Forman seemed more interested in showcasing her own employer, a leading U.S. environmental NGO. The subtext was clear: U.S. nonprofits are reliable and worthy targets for donors; Japanese groups are a risky proposition at best.

Nothing could be further from the truth. Yes, Japan is light-years behind the U.S. when it comes to waking up to the necessity and value of nonprofit organizations. Yes, U.S. nonprofits are sophisticated, well-established and thriving, a vital link in the policy process, while most Japanese groups struggle for manpower and funds, and remain fringe players in the policy debate.

But Forman was missing the point. Given Japan’s history and political culture, the fact that a nonprofit movement is starting to be taken seriously at all is remarkable. And foreign residents and corporations — with their long experience overseas — could do much to steer and encourage Japan’s nascent not-for-profit movement.

Since 1998, when the Nonprofit Organization Law slashed the time and paperwork required for incorporation, over 2,500 groups have been officially certified, with the number expected to top 3,000 by the end of this year, reports the Economic Planning Agency.

Once the arch-enemies of Japan Inc., nonprofits have a new luster, thanks to the Great Hanshin Earthquake of 1995. The dedication and efficiency of the more than 1 million volunteers in Kobe posed a stark contrast to the bumbling and bureaucratic government response, a national wakeup call about what determined individuals could accomplish.

Until Kobe, “citizens thought they could rely on government for everything,” notes Emiko Nagasawa, of Keidanren’s corporate philanthropy office. “But after the earthquake, they realized it was an illusion. Kobe was when our sense of citizenship was born.”

Japan’s sputtering economy and the looming crisis over how to support a nation of elderly have also convinced lawmakers that a vigorous nonprofit sector is desperately needed. “Japan’s fiscal situation is so bad that getting NPOs to do the work of government is now a legitimate way to think,” says Andrew Horvat, of the Asia Foundation, a U.S. government-funded organization which, among other things, offers training workshops for Japanese nonprofits. Fostering nonprofits is “a lot cheaper than raising taxes and hiring government officials who are likely to be far less efficient.” (In Japan, “NPO,” or nonprofit organization, usually refers to groups working on domestic issues, while an “NGO,” or nongovernmental organization, works overseas.)

Japanese nonprofits tend toward health, medical and welfare activities, such as nursing and handicapped care, but pursue the gamut of needs, from domestic abuse hotlines and childrens’ theater, to city planning panels that give residents a voice in local development.

The NPO law’s major defect is it lacks an IRS-style 501(C)3 provision, permitting tax-exempt individual donations to nonprofits, an issue earmarked for review next year. Partly for this reason, many of Japan’s estimated 80,000 existing volunteer groups have chosen to remain unincorporated.

Japanese nonprofits are at an important juncture. Interest in voluntarism is at an all-time high, yet the sector is severely constrained by lack of funds. A handful of large and well-established volunteer groups such as the Japanese Organization for International Cooperation in Family Planning enjoy budgets topping 100 million yen and hundreds of volunteers, but the typical group is far smaller and less well-endowed. Seventy percent of the NPOs in a study last year had budgets of 50 million yen or less; roughly half of these operated on 5 million yen or less. A Nihon Keizai Shimbun survey in mid-1999 of 287 nonprofits found the sector averaged about four personnel, two of them paid. Eighty percent of NPOs surveyed reported their main headache was scarce or unstable income, largely from membership fees and the sale of goods and services, such as books and lectures.

Proponents argue that warts and all, the new nonprofit law is important both as a symbolic first step toward a more democratic society, and as a practical matter, because it compels fiscal and managerial discipline in a sector notoriously short on both. By gaining legal status, volunteer groups also gain the right to open bank accounts, rent space, and operate in the name of the organization, rather than placing that burden on an individual member.

The new law, wrote NPO expert Tadashi Yamamoto, caps “a growing movement in Japan to reduce the influence of government bureaucrats and to have citizens take public interest into their own hands.”

To truly appreciate how far Japan has come, you have to look at where modern volunteerism here began. Japan’s postwar obsession with growth at any cost spawned a number of exceptionally nasty pollution disasters in places like Minamata and Niigata, where residents perished after consuming mercury-laced fish. Citizens organized into populist groups, or “shimin undo,” to protect their homes, their jobs and their lives. Activists and government tended to regard each other with mutual fear and loathing, an attitude that lingers in some quarters today. Japan does have a tax-free category for nonprofits, but the conditions are so onerous only about 1,000 organizations have qualified. The U.S., with twice Japan’s population, has nearly 800 times as many tax-exempt groups.

Yet despite the odds, Japanese nonprofits are starting to flourish. “The low number of people in an average NPO is misleading,” said Horvat of the Asia Foundation. “Some of these groups are world-class.” Kiko Network, for instance, a coalition of 150 scientists, environmental groups, Diet members and individuals, arose quickly in 1997 after the Kyoto conference on climate change and supplies expert, timely information on just about anything related to energy conservation and greenhouse emissions.

Last year, for instance, the network alerted Upper House member Shuichi Kato about a quiet abandoning of wind-power projects, a clear retreat from Japan’s stated policy of promoting alternative energy. Called on the carpet, the government returned with concrete proposals for meeting its mandated target.

The Japan International Volunteer Center has dispatched relief workers to developing countries since 1980. “We act according to the conditions of the local people in these areas, even in places with which Japan does not have diplomatic relations,” said Toshihiro Shimizu, an official with the group.

Keidanren is among the nonprofit community’s most enthusiastic fans, and helped lobby for passage of the bill. “Japan doesn’t have enough creative thinkers,” says Nagasawa of Keidanren. “But nonprofits are resourceful and flexible” and can help companies develop take-charge workers with initiative.

But Keidanren’s One Percent Club has enrolled only 281 companies — less than one-third of its membership. A 1997 Labor Ministry study found only 2 percent of Japanese firms have systems allowing employees to take time off for community service.

“U.S. companies tend to encourage their workers to volunteer, but Japanese employers don’t, and that makes a big difference,” says Akira Matsubara, director of the independent, nonprofit Coalition for Legislation to Support Citizens’ Organizations, known as C’s, which was instrumental in passage of the nonprofit law. “Employees are afraid that if word gets out about their volunteer activities, they’ll be considered weird or be ordered to work harder.”

Some foreign corporations in Japan have become involved, sponsoring arts projects, donating equipment, food or plane tickets. Levi Strauss & Co. delegated $160,000 to the Japan Center for International Exchange, which handled the legwork of soliciting and screening grant candidates; among the recipients were an advocacy organization for foreigners who had overstayed their visas, and a mentally handicapped center. Amway has given away 540 million yen to 46 projects here and abroad, including sea otter and coral reef preservation, and a citizen-run land trust program in Mie Prefecture. AIU last year began subsidizing a program at the YMCA for training teachers of learning-disabled children, a long-neglected area in Japan.

American and other foreign corporations could be doing much more to help inspire, lead and nurture Japan’s emerging civil society at an extremely critical juncture — and serve as models for corporate citizenship.

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