Economic Analysis of the Nonprofit Sector
Naosumi Atoda, Naoto Yamauchi, Takayoshi Amenomori,
Mio Ohta, and Takeshi Yamada
Abstract
Along with a more diversified sense of values and the trend towards "less government," support for nonprofit activities - for example, culture and the arts - by private organizations has recently attracted attention. This report will, as an analysis of current conditions, clarify the issue of how to define the private nonprofit sector, as well as reevaluate the scale of nonprofit economic activity by employing a new definition. The resulting economic scale of the nonprofit sector, based on expenditure levels, turns out to be three to four times larger than the figure generated using value added, due to the existence of sizable transfer expenditures. As for revenue, 70% comes from membership fees and over 10% from operations, indicating that organizations are making efforts to generate income in the absence of sizable voluntary donations. Under these circumstances, we have identified problems with the Japanese system in this report. For example, Japan's public interest corporation system does not adequately assist private organizations in realizing pluralistic, diversified strategies. In addition, the tax system gives corporations preferential treatment for donations, with little consideration given to individual donations.
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