Moreover, companies, as well as groups of companies or trade organizations, are engaging in social activities and establishing their own NPOs. Reflecting the current sluggish economic conditions, this trend has not yet picked up momentum, but there are many signs pointing in that direction, so that in the future they will undoubtedly become brisk.
Problems facing NPOs
While these trends are visible, the operating basis of Japan's NPOs has yet to be consolidated. Many problems have to be overcome before they can cooperate with the government and businesses as equals.
One of these problems is the absence of a tax system for strengthening NPOs' economic basis. A system of taxation needs to be established that will promote the flow of funds to NPOs. Under such a system, individuals and businesses will be able to donate to NPOs and receive tax incentives, and when an NPO engages in profit-making business activities, it will be entitled to receive corporate tax exemptions. The NPO Law stipulates that such institutional reform should be carried out within three years after it comes into effect. At present, advocacy groups in a federation of Parliamentarians and those in a federation of civilian organizations are actively promoting their respective causes. Expectations are high that a clear direction will be confirmed by December.
Even if a tax system favorable to NPOs is adopted, it will not mean that the economic strength of NPOs will be immediately enhanced. For that to happen, each NPO will have to strive to win the support of the public for its activities. The important thing is to create conditions in which the presence of many easily accessible NPOs will enable a person to have a real feeling that his or her life has indeed been enriched as a result of their presence. It is only when these efforts are properly coordinated that a new NPO tax system will begin to have any practical effect. And that will indeed mark the creation of a new nonprofit culture.
