Public sector-dominant fields.
In the two remaining fields, health and social services, the Japanese government plays the dominant role in financing nonprofit action. This is consistent with Japan's tradition of government support in these areas of service, especially in the field of health. Under the Japanese comprehensive and compulsory health insurance system, a substantial part of the cost of medical service is paid by the government, though the services are actually delivered by large, private nonprofit hospital corporations.
7. Changes in the Japanese nonprofit sector (1990-95)
Between 1990 and 1995, the Japanese nonprofit sector grew by 27 percent, adding 451,000 new FTE jobs to the Japanese economy. The sector's growth exceeds that of total nonagricultural employment growth during the same period by a ratio of 2:1. However, the expansion of the nonprofit sector was not as fast as that of the service industry as a whole. As a result, the nonprofit sector's share of service employment actually shrank from 8.6 percent in 1990 to 6.8 percent in 1995.
Another interesting shift in this time period occurred in the sector's revenue structure. Total inflation-adjusted revenue grew by over $23 billion, of which nearly 98 percent came from public sector payments. This trend toward etatization of the nonprofit sector diverges from that toward marketization, i.e., growing reliance on fee income, observed in the U.S., France, and Germany. In fact, the inflation-adjusted level of fee income in Japan actually shrank between 1990 and 1995. At the same time, the level of support from private giving grew 22 percent. Nevertheless, since this income source accounts for only a miniscule share of total nonprofit revenue, this growth was dwarfed by the massive influx of public sector payments.
III. Conclusions and Implications
The Japanese nonprofit sector stands today at an important crossroads. Though containing many huge institutions and accounting for a considerable range of human service activity, this set of institutions long operated in the shadow of a dominant state bureaucracy and enjoyed only limited grassroots support. In the wake of the Kobe earthquake of 1995 and the subsequent Russian oil tanker disaster in the Sea of Japan-events that demonstrated the limitations of the governmental bureaucracy and galvanized the Japanese voluntary spirit-the winds of change are clearly blowing in Japan. A new "NPO law" (Law to Promote Specified Nonprofit Activities), passed by the Japanese Diet in 1998, significantly simplified the process of obtaining nonprofit legal status for unincorporated groups. More than 3,000 specified nonprofit corporations were born since the enactment of the Law. "Civil society" (shimin shakai) has become a topic of interest for the Japanese media and has penetrated public discourse. Moreover, a growing number of academics and researchers have discovered the nonprofit sector and have begun to build knowledge about its contours and possibilities. Politicians, bureaucrats, and even the general public are becoming increasingly more interested in the potential roles of nonprofits in Japanese society.
All of this poses important challenges but also important opportunities for Japanese nonprofits. At issue in Japan, as in many of the developed countries, is not simply the existence of nonprofit organizations but rather more fundamental questions: for what purpose and under what terms should nonprofits exist? Important questions are thus being raised about the character of the nonprofit organizations that exist and about the values they should be called on to serve.
As these issues are debated, the Japanese nonprofit sector, like those in the other developed countries covered in this volume, faces the challenge of cultivating and maintaining the citizen base that has begun to expand over the last decade. As part of this effort, nonprofit organizations in Japan, both the more formal "corporations" and the grassroots groups, will face the challenge of moving toward greater openness in disclosing their activities to the general public. This will help to ensure their accountability and defend the sector's worth.
