Savings can be used for investment in facilities or can be applied to land or financial assets (capital procurement accounts).
Economic activities of NPISHs over the space of a year, whilst being influenced by the assets and liabilities (i.e. portfolio composition) accumulated at the commencement of the financial year, also restrict portfolio composition at the close of the year. For example if financial assets increase capital income will also increase (the causal relationship from stock to flow) and as the percentage accumulated increases the expansion rate of net assets will also accelerate (the causal relationship from flow to stock). NPISH assets and liabilities are shown in the balance sheet.
Looking at the macro-level scale of activities for 1997 NPI output totaled 18.7 trillion yen, which represents 3.7% of GDP. Subtracting interim expenses from this figure produces a gross value added amount of 12.1 trillion yen, which represents 2.4% of GDP. The net assets of NPISHs at the end of the 1995 financial year were 66.5 trillion yen, which is 2.1% of national wealth (the entire nation's net assets). Looking at time series data on NPISH activities (Figure 2 and Table 1) we can see that both output and the gross value added worth as a percentage of GDP are slowly but steadily increasing.
****** (Figure 2) ******
****** (Table 1) ******
Against the backdrop of the extended recession and extremely low interest rates, NPISHs such as foundations that rely heavily on capital returns are recently finding conditions extremely tight. As a result, an increasing number of organizations have had no choice but to reduce the scale of their activities. According to SNA data, asset income receipts have dropped drastically, from a peak in 1991 of 1.5 trillion yen, to 0.5 trillion yen in 1995, figures which clearly demonstrate the rapid fall in asset derived income. In particular, since 1992 instances have arisen where asset income related expenditures have outstripped the income earned.
3. The limitations of SNAs
As we have seen above, SNA statistics provide a wealth of information on the nonprofit sector. In addition, as SNA are composed in accordance with UN estimation guidelines,we may easily believe that it will be simple to conduct an international comparison on the nonprofit sector by extracting data on NPIs in each country.
However, SNA statistics are not as universal as they appear. In fact, of the countries that produce SNA statistics, there are very few that estimate and distinguish the private nonprofit sector3. Japan is one of only three countries including France and Portugal that estimate and release data on all items requested by the UN. However even these data are limited, as it must be noted that the nonprofit sector has the poorest level of useable primary data, and is the area with the weakest levels of estimation amongst data collected through SNA. In addition, SNA tends to adhere to a very narrow definition of nonprofits, regarding them as exceptional organizations that are neither government nor for-profit corporations4. This format may have been feasible in the 1960s when SNA began to collate data on this area, but given the steady growth in the sector in recent times there is an increasingly high risk that figures on the economic strength of nonprofits is being underestimated5.
III. Japanese Nonprofits in Comparative Perspective
1. Johns Hopkins Comparative Nonprofit Sector Project
One of the first efforts to assess Japan's nonprofit sector in cross-nationally comparable terms was undertaken by a Johns Hopkins team in 1990. This section represents the results of the second such attempt, undertaken in 1995.
