[ Keidanren ] [ Policy ]

White Paper on
Corporate Philanthropy in Japan 1999

(Tentative Translation of the Excerpt)

September 1999

Keidanren(Japan Federation of Economic Organizations)

This publication is an excerpt from "Shakai Koken Hakusho 1999"
(White Paper on Corporate Philanthropy 1999), published in Tokyo in July 1999.

I. Perennial Philanthropic Activities within Corporations
II. The Role of Corporate Philanthropic Activities During a Time of Economic and Societal Upheaval
III. New Trends Perceived in Examples Drawn from Different Companies
I. Rising Expectations on Nonprofit Organizations
II. The Transition from "Aid Given to Nonprofit Organizations" to "Cooperative Work with Nonprofit Organizations"


I. Perennial Philanthropic Activities within Corporations

A corporation performs many roles within society. That is to say, a company earns profits through creating services and materials which a society finds necessary, then supplies those services and materials in response to the demands of customers. Corporations also maintain the workings of capitalism through using those profits to disburse dividends to its stockholders. Moreover, companies aid in maintaining societal stability through ensuring employment to its personnel and by collecting taxes. Corporations have contributed to the prosperity of the overall society through bearing the burden of insurance costs for programs such as health and unemployment. In addition to these roles, corporations have instituted as a major goal of management to contribute in various ways to localities and society. These efforts to utilize managerial resources toward solving problems within society is the very essence of corporate philanthropic activities.
Corporations began to have the ability to apply surplus capital toward philanthropic activities after profits rose thanks to the very good performance of the Japanese economy in the latter half of the decade of the eighties. There was a growing trend for corporations to systematize and institutionalize philanthropic activities since corporations had an inherent responsibility as an important entity within society.
However, philanthropic activities have now become a target for the budget knife since cost cutting became inevitable as corporations searched for ways to survive in the wake of the bursting of the bubble economy in the decade of the nineties. Nevertheless, activities by nonprofit organizations (NPO) and volunteer activities by general citizens finally began to take root in Japan during the opportunity presented by the Great Hanshin Earthquake which hit the city of Kobe and Awaji Island in January 1995. Indeed, these activities aided in devising the NPO legislation passed in 1998. In this manner, philanthropic activities have taken place in the nexus between companies and an economic society undergoing great change.
Japan Federation of Economic Organizations (Keidanren) is a federation comprised of major corporations and as a federation performs surveys on corporate philanthropy. According to the surveys, the average money spent per company on philanthropic activities has been around an annual 400 million yen through the decade of the nineties. In addition, companies have become more skilled in techniques to make activities more effective. Companies have also expanded the range of voluntary activities and developed activities within a variety of fields. During the 1990's when companies have been slashing activity funding and personnel, each company has had to question the reason for the firm engaging in philanthropic activities. Once a company has determined the value of philanthropic activities during these tough economic times, company leaders have had to place these activities within the company organization and introduce concrete strategies and policies while gaining the understanding of others both inside and outside the firm. We need, once again, to verify what kind of ideals have supported corporate philanthropic activities in the decade of the nineties.

II. The Role of Corporate Philanthropic Activities During a Time of Economic and Societal Upheaval

(1) A Company Exists as One Member of a Society, as a Corporate Citizen. As a Corporate Citizen, a Company Contributes to Developing and Maintaining a Robust and Active Society

After the so-called bubble economy burst, the Japanese economy was plunged into a severe environment with structural problems piling one on top of the other. These problems include a tardiness in establishing new enterprises during a period of sluggish demand. Concurrently, an acceleration has taken place in the movement away from the public sector to the private sector as shown by a relaxation in regulations, governmental reform and an emphasis on local government rights. There exists a growing appetite among citizens for shifting over to the private sector services which had previously been granted to government. Citizens also seem to have a greater appetite for developing a range of diverse non-governmental activities.
With the background presented by the economic and societal situation, the Japanese people felt a sense of crisis that the obstructive character of Japanese society would not vanish as long as society did not receive infusions of freedom, openness, mobility and diversity. However, the people are making a transition from this sense of crisis to a sense of growing expectations on nonprofit organizations to bring new ideas, energies and a flexibility into society. Without a "robust and active society" corporations will be unable to attain continuous development. A key point here is for corporations to overcome the obstructive nature of Japanese society by participating as one member of society through philanthropic means and through support given to nonprofit organizations.
In addition to the government and corporations, nonprofit organizations must become the third leg of the organizational tripod needed to support the running and management of society into the future. The realization of a truly abundant and active citizen-based society permeated with the principles of independence, self-help and personal responsibility becomes a possibility for the first time by clearly placing nonprofit organizations as the third sector within society.

(2) Corporations will Contribute to a Sense of the Value of Companies by Becoming Sensitive to Societal Needs

As we exist in an era of global competition, consumers will continue to make choices about corporations in ever more exacting ways. In order for corporations to maintain the possibilities for new development, the leaders and employees who work within a company must act as a sort of wide-ranging antennae which touch upon the actual conditions within society and become aware of values and viewpoints which are not asserted on a daily basis. Using these perceptions, company members must create products and services which customers will truly value.
Moreover, we exist in an era of frenzied change. Corporations are faced with the necessity to enhance their abilities to respond to changes in situations or conditions. Corporations must respond by sounding the keynotes of flexibility and diversity rather than by emphasizing unity and uniformity which was only effective during the period of high growth. Philanthropic activities are gaining attention as one effective tool for companies in gaining abilities to respond with greater flexibility.
Corporations can learn skills and gain motivation for change and cooperation by teaming up in partnerships with nonprofit organizations which are revealing their unique abilities and special talents in addressing problems at the cutting edge of society. Through these partnerships, one can anticipate that corporations will expand their range of activity and generate future enterprises.

III. New Trends Perceived in Examples Drawn from Different Companies

Corporate philanthropy finds itself in a severe situation due to budget restrictions over funding and personnel. This severe environment has come about because of a sluggish business climate that has extended over a long period of time. And yet, thanks to the wisdom and resourcefulness of personnel placed in charge of philanthropic activities, it seems that even under these restrictions, philanthropic activities have blossomed into ever more diverse and rewarding projects. One may catch a glimpse of the following new trends within this evolution in philanthropic activities.

(1) Specifying the Themes and the Range of Activities

One trend becoming apparent is the tendency for focusing in on certain themes or specific fields when a corporation aids a nonprofit organization or when a corporation plans and enacts its own philanthropic activities. Within the survey performed by Keidanren, corporations which are "establishing an emphasis in certain fields" are increasing gradually. When checking the types of activities at each company, one observes that corporations which perform all-around, across-the-board philanthropic activities are growing fewer in number.
For example, one foreign-owned computer manufacturer at the time of the inception of the company selected "well-being" as a theme which would be easily accepted by society. This company has now spent more than ten years working with this theme in developing a system to aid people suffering from sight problems. Within the wide-ranging field of philanthropy called in Japanese "mesena" from the original French "MDOat" referring to patronage for the arts, one cosmetic manufacturer is focusing on the theme of nurturing young artists while a beer brewing company has selected the theme of supporting modern art. There are trading companies-even amongst the class which have high earning priorities--that aim to introduce the theme of the environment into operations by passing prospective projects through an environmental section. This section checks the project for environmental impact and then implements systems designed to dissuade business projects which would have a negative impact on an area or within the environment.
In addition to the obvious factor of financial restrictions during the sluggish business climate, the reason that corporations push ahead with activities focused on certain themes or specific fields is because a corporation will always aim to use its limited resources most efficiently. Corporations use resources most efficiently by pursuing activities suited to the corporation's managerial ideals and suited to other factors such as the corporation's type of business, peculiarities of the company's locality or certain company traditions. In addition, through continuing with these activities, the activities have gained appreciation both inside and outside the company and will likely be accepted as a part of the corporate culture.

(2) Aid to Cutting-Edge Activities from Grass Roots Groups

During the last half of the decade of the eighties, corporations engaged in philanthropic activities and "MDOat" programs for the arts as part of a strategy to boost each company's corporate image. Especially noticeable during the bursting of the economic bubble were the many examples of corporations that cooperated in large-scale events put on by organizations which had already gained appreciation by society. One could say that providing aid to well-known organizations was the most efficient way to boost corporate image. However, nowadays, examples are increasing of corporations that directly aid cutting-edge activities at the grass roots level which reflect the intentions of the employees and which corporate personnel who take charge of philanthropic activities have discovered and selected.
A certain parts manufacturer which has supported activities tied closely to its locality had heretofore contributed money through cooperative fund-raising entities, but has now altered its practices to contribute a portion of its donations directly to local nonprofit organizations which ask for contributions. The manufacturer is working toward establishing a network in the area by assigning personnel to visit each of the nonprofit organizations that have requested funding to discuss matters such as the possibility for cooperating in ways other than monetary contributions.
There is even an insurance company that changed its method of determining the recipients of its employee donation funds. The company had a 40-year tradition of subcontracting the task to a newspaper company, but has now switched to a new method of selecting recipients through employee ballot.
The act of aiding these type of grass root groups perhaps shows that corporations want to expand creative and cutting-edge activities, that companies wish to participate in society and also construct a society would accept a variety of these activities.

(3) Using Various Resources Held by Corporations

In the past, most corporations had placed an emphasis on donating money in performing philanthropic activities. Unfortunately, there are few studies which investigate exactly how these capital contributions have been useful. Among the nonprofit organizations which were the recipients of the aid, there have even been some representatives who said "We welcome monetary aid, but we do not want it to affect our activities."
Nevertheless, in the latter half of the decade of the nineties, corporations caught a new vision of philanthropic activities. During this time, both corporations and nonprofit organizations gained an appreciation of each other's position and goals. Consequently, both entities pushed ahead with their cooperative activities while verifying procedures to attain the goals of the various activities. Within such a partnership, a corporation would become aware that the needs of the nonprofit organization were not restricted to money but extended over a broad range of areas including facilities, products, personnel, information and publicity media as well as specialist knowledge regarding legal and financial affairs. After discovering these needs, corporations have worked to meet these other needs in cooperative activities.
For example, one corporation gave lodging at a corporate dormitory to a family from an outlying area that had a child suffering from an intractable disease in a hospital. One communications company designed and supplied a miniature transmitter for use in a survey to track the movements of migrating birds. Another company supplied the know-how to put together pamphlets for public performances of music concerts and dramatic plays. There have even been corporations that registered employees who voiced a desire to use their specialized knowledge while taking part in voluntary activities. The corporation would then dispatch the employees to local nonprofit organizations and schools during business hours.
Within the current movement in the business world to change employment practices and transfer personnel among affiliates, it is likely that there will be an increase in the number of instances where corporations send personnel to nonprofit organizations and that retirees or voluntary retirees will gain reemployment within nonprofit organizations.

(4) Establishing a Network among Corporations

One sees more and more examples of philanthropic programs performed through a number of corporations which share similarities in services or products, or find common interests being located within the same region or perhaps are within the same business field. As examples of cooperative projects among corporations which had business offices within the same area, there are many instances of different companies teaming up with volunteer centers to perform charity events or lecture series in locations throughout Tokyo including the Minato, Chuo, Chiyoda and Sumida wards. Among corporations which have engaged in "MDOat" activities, one sees instances of companies that have encouraged the recipient entity to find more corporate sponsors.
In this manner, a number of corporations will cooperate to perform a project and through this multi-corporate aid, one nonprofit organization can draw on each of its sponsor's strengths and unique resources to develop a project in the most efficient manner. At the same time, the nonprofit organization finds it easier to ensure corporate sponsorship over the long term because the nonprofit organization can hold down the financial amount of the contribution paid by each cooperating company. Moreover, there is a benefit that accrues to the nonprofit organization in this type of relationship. The nonprofit organization can maintain a more equal and balanced relationship with any single corporation as the organization gains recognition from a broader range of companies and participating personnel.
Philanthropic activities are not a competitive field between corporations, nor are they source of antagonism regarding the division of profits. For these reasons, there are few, if any, obstacles in teaming up a number of corporations in a cooperative philanthropic activity. One can anticipate that in the future corporations will proceed in networking between themselves to activate ties in cooperative projects with nonprofit organizations.

(5) Developing Business Enterprises Similar to Projects Carried Out by Nonprofit Organizations

Even within corporate business there exist enterprises that are similar to the projects carried out by nonprofit organizations. Generally speaking, these enterprises are but one of the many company products and services designed to meet a variety of needs. But one might cite examples including a company designing a braille plotter for use by the blind. Or perhaps one might cite the examples of other companies cooperating in sharing technologies to design improved chairs or skis to meet the specific needs of certain customers. More than any profits that might accrue from the product, the corporation engages in these enterprises in order to more finely hone its sense of mission.
After April 2000 in conjunction with the introduction of the system for home nursing insurance, one might anticipate the appearance of corporations which will tackle these type of projects which are so similar to those carried out by nonprofit organizations. This seems most likely among those companies already engaged in devices used in the medical field. One can expect that a new corporation could well team up with an already existing nonprofit organization and both members of the partnership could polish each other's skills and develop ever more significant products while planning new cooperative endeavors. One corporation has already announced plans to operate a comprehensive facility for the aged in cooperation with a nonprofit organization.
It seems there is a high probability that corporations which engage in projects that are similar to those carried out by nonprofit organizations and nonprofit organizations which engage in profit-making ventures could well mix and could well evolve into some entity without the traditional borders between the profit and non-profit management styles.


I. Rising Expectations on Nonprofit Organizations

In addition to the traditional sectors of the government and corporations, there is the necessity of placing nonprofit organizations as a new third sector within society. Only by so doing, will we be able to solve societal problems that will grow ever more complex and be able to overcome the obstructive nature of Japanese society. The reason for this necessity is that nonprofit organizations can produce more self-propelled programs which use the vision and specialized knowledge borne of varied and different perspectives.
The anticipated function of nonprofit organizations is spelled out by the Subcommittee on the Main Economic Role of the Economic Council (?) within its report published in June 1998. The report specifically lists three roles of nonprofit organizations. The first role is to provide feedback to corporations concerning efforts to promote business in an outlying district which will become the foundation for local corporate activities. The second role is to establish an infrastructure conducive for business in information industry. The third role is to scrutinize corporate activities and collect the evaluations and conclusions of individual consumers. In addition, the expectations grow day by day for nonprofit organizations as these organizations gain attention as new and independent entities and a good place to research reemployment opportunities.
As one observes the movement to revise anew the concept of the public interest, one can see that many of the new definitions take form around anticipated results from various activities and services provided by entities such as nonprofit organizations. Heretofore, the generally accepted idea was that "the public interest is what the government brings about". However, the Japanese society of the present day is modifying itself to meet an era of diversity when "citizen needs" or the "public interest" will be difficult to define or satisfy with any single idea or viewpoint.
There is a growing appetite for societal planning in which the private sector plays a key role. This appetite is evidenced nowadays by the relaxation in regulations and governmental reform. This trend is the inevitable result of citizen desires to want to receive various services. This trend also reflects the obvious limitations that appear when societal services are provided by the public sector playing the key role. The philanthropic activities fostered by corporations and the efforts made toward solving societal problems by nonprofit organizations are not actually in and of themselves ventures in pursuit of the public interest. Rather, these ventures are self-propelled programs which are performed based on the circumstances presented by the problem at hand. Nevertheless, when viewed from the standpoint of society as a whole, each of these efforts addresses a specific societal need and is tied to the formation of a revised concept regarding the public interest.

(1) Nonprofit Organizations as a Partner in Corporate Philanthropic Activities

Each corporation has begun to gain an understanding of the content, characteristics and significance of philanthropic activities acquired in conjunction with efforts into establishing contacts with various nonprofit organizations fulfilling various roles. These roles include being the beneficiary of contributions, the recipient of voluntary activities by employees or being the partner in a program established by the company itself. Tremendous results were obtained from these contacts when corporations and nonprofit organizations teamed up to plan relief efforts in the wake of the Great Hanshin Earthquake which unfortunately hit Kobe and Awaji Island in January 1995. Enterprises and nonprofit organizations were able to capitalize on each other's strengths to tackle problems at the site of the disaster when government was either short handed or lacking in know-how.
From these types of experiences, corporations learned that there were limits to the knowledge and skills residing within the company itself when engaging in philanthropic activities. Corporations also gained an appreciation for the pure devotion toward the mission shown by nonprofit organizations. Moreover, corporations had to concede that nonprofit organizations surpassed the abilities of the corporations themselves in grappling with problems, expanding networks and persevering in the mission.
However, it is not an easy task to create an equal partnership when corporations team up with nonprofit organizations. The problems pile up to present a veritable mountain of obstacles. These obstacles include the entirely different styles of running an organization. Another obstacle is the fact that nonprofit organizations still have a weak foundation within society since they remain lacking in financial and personnel resources, as well as the fact that information regarding nonprofit organizations remains rather unorganized.
In an effort to solve some of these problems, members of the Diet began in the latter half of the decade of the nineties to draft legislation known in Japan as the NPO (nonprofit organization) Law. This law enables nonprofit organizations to gain recognition more easily as a public interest corporation. This recognition grants a legal status which makes it easier for nonprofit organizations to gain societal recognition as a permanent organization. When this law was still a bill undergoing debate, corporations paid close attention to the process and indirectly aided its passage. For its part, Keidanren acted in concert with nonprofit organizations to work for the bill's passage. In October 1997, Keidanren issued an opinion paper stating a desire for the quick passage of the NPO Law during a special session of the Diet. In addition, President Yasuyuki Wakahara of Keidanren's 1% Club argued for a quick passage of the NPO Law within a declaration of opinion issued in February 1998.
As a result, the law was passed in March 1998 and has been in effect since December of the same year.

(2) The Significance of the NPO Law

Most nonprofit organizations were unable to attain status within Japanese society as a corporation but were rather left in the position of a voluntary association. As such, nonprofit organizations often met with difficulties in trying to push ahead with daily activities. These difficulties included the necessity of working under the name of an individual representative when registering assets or opening an account at a financial institution.
Under the system for nonprofit corporations as specified by Section 34 in the Civil Law, the determination as to whether or not an organization was working toward the public interest was left to the legally qualified authorities within government offices. Needless to say, gaining status as a public interest corporation was an extremely difficult process for citizen groups that were performing a variety of activities.
Through the NPO Law now under effect, a nonprofit organization can gain legal status as a corporation by filling out a simple form which allows little room for discretionary meddling by bureaucrats. Nonprofit organizations which receive legal status as a corporation can perform their multiple operations and gain recognition from the public under the name of the organization. In addition, after receiving status as a corporation, the organization has the responsibility for public disclosure of matters such as operations and financial accounts. In conjunction with the advance of these types of public recognition and information disclosure, the likelihood exists for corporations, governmental entities and individual citizens to have much more contact than ever before with nonprofit organizations. Within the process of these contacts, those nonprofit organizations which are not beneficial to society will doubtless be weeded out and only those nonprofit organizations which truly grapple with solving problems will go on to survive.
Because of the short amount of time that the NPO Law has been in effect, one is yet unable to evaluate its success or failure. However, there have been people connected to nonprofit organizations who point out that "A new relationship has come about between municipalities and citizen groups in the process of discussing regulations accompanying the enforcement of the NPO Law." or from another "There has been a significant jump in public awareness of nonprofit organizations as the debate proceeded on the NPO Law."
Enterprises did indeed join in philanthropic activities with voluntary groups that did not have legal status as a juridical person before the passage of the NPO Law. In the future as well, far more important than any worries over the presence or absence of status as a juridical person is the process of creating a relationship of trust through direct, face-to-face discussions between members of both the corporation and the nonprofit organization.

(3) The Greatly Desired Strengthening of the Societal Infrastructure for Nonprofit Organizations

Nonprofit organizations are self-propelled groups that grapple with solving societal problems based on a sense of mission. All of the resources of the group including finances, personnel, data and networking equipment are collected for the express purpose of fulfilling that mission. Because of this fact, it is often the case that these groups do not pay enough attention to mundane organizational operations.
In order for nonprofit organizations to develop as separate entities and in order to expand with different tiers internally, the nonprofit organization itself will be required to work toward publicly disclosing its operations and financial accounts. Moreover, in order for nonprofit organizations to proceed with activities in cooperation with corporations, the nonprofit organization itself will need to take the initiative in presenting draft proposals for cooperative projects to corporate leaders.
While nonprofit organizations will face these harsh facts, it must be admitted that the nonprofit organizations in Japan are still weak and fragile in the extreme when compared to the healthy condition of organizations in Europe and the United States. In order to achieve a strong and steady foundation for the existence of nonprofit organizations there is already the need to begin discussions regarding the various policies to govern these organizations including the granting of preferential tax procedures so that these policies might be reflected in the revision of the NPO Law within a few years.

A. Raising the Deduction Limits on Income (Figuring in Monetary Losses)

In order to ensure continuous and stable donations from corporations, the government must raise the level of overall contributions by lifting the deduction limits on charitable contributions, that is to say by allowing businesses to figure in monetary losses. There is no way to argue that the current limit on figuring in monetary losses is sufficiently high because approximately 60 corporations donated amounts above and beyond the limits for figuring in monetary losses in fiscal 1997 as shown by the Keidanren survey. Moreover, there is plenty of room for improvement as well in the deduction limits on individual income. The minimum deduction for income taxes is 10,000 yen and for the residential tax is 100,000 yen. Hence, donations which are smaller than these amounts would not be counted. The reason that the total amount of individual monetary contributions in Japan is so strikingly small when compared to other nations in Europe and America is not because the Japanese have no tradition of charitable giving but because the nation has not prepared the right conditions to encourage contributions.

B. Fully Expanding Entities Granted Preferential Tax Treatment

In the case of a corporation, it is allowed to compute as a loss any donation to a "special public-interest promotion corporation" separate from general contributions. In the case of individual contributions as well, only contributions, other than contributions to the nation, to school foundations, to social welfare corporations or other designated contributions, that become tax deductible are contributions to these "special public-interest promotion corporations." But the number of these special public-interest promotion corporations hardly exceeds 900 in all of Japan. Whereas in the U.S., the number of entities for which preferential tax measures are granted for donations under 501 (C) 3 of the internal revenue code amounts to around 300,000 and that figure excludes churches. In order to propel a wide variety of contributions within Japan as well, the government must boost the amount of entities for which donors can receive as much preferential tax treatment as that given by for contributions to special public-interest promotion corporations. However, as we go about expanding the entities for which preferential tax measures are granted, one must not forget the necessity of applying the scalpel to the procedures by which the government currently designates special public-interest promotion corporations. Alterations will be unavoidable in the process of determining the public interest which has heretofore been defined by the government alone. A nonprofit organization will be given preferential tax measures based on publicly disclosed information such as reports issued by the nonprofit organization itself regarding its operations and finances. The government should by all means also introduce governmental policies to assist donors who make their own decisions based on publicly disclosed information to contribute in sort of a flow of capital from one member of the private sector to another member of the private sector. One hopes that the first step by the government in assisting this process would be to institute a system of deductions for charitable contributions donated to nonprofit organizations. The government would have an opportunity to do this in November 2001 when the NPO Law comes up for revision.

(4) Expectations on Intermediary Organizations and Infrastructure Organizations

In order for nonprofit organizations to propel ever more diverse and free activities, there will be the necessity for each nonprofit organization to expand its activity base. In addition, intermediary organizations and infrastructure organizations will play a significant role in coordinating philanthropic activities into more efficient programs by connecting with participants including corporations, individuals and governmental offices regarding finances, personnel and other information.
A number of entities are making an appearance on the scene including community foundations and centers to aid nonprofit organizations in every area such as the Japan NPO Center established in 1996. However, these bodies are impeded in performing sufficient service because of tax restrictions and public regulations extending over a number of fields.
The key for corporations, individuals, nonprofit organizations and government offices to cooperate with each other and push ahead with various activities is held by intermediaries that extend over multiple fields or local community foundations or even establishments set up as a go-between for private sector contributions. Governmental support is also necessary for these types of organizations. Policy makers should also hold discussions concerning the function of intermediary organizations in activities by corporations and corporate foundations and the role to be played by intermediary organizations which make the best use of networking skills between corporations.

II. The Transition from "Aid Given to Nonprofit Organizations" to "Cooperative Work with Nonprofit Organizations"

There are many personnel placed in charge of philanthropic activities who have voiced the distinct impression of just how effective cooperation with nonprofit organizations is when corporations push ahead with philanthropic activities. It seems that there are more and more activities in which the participants form true partnerships.
However, there have also been many examples of corporations that made donations to nonprofit organizations after determining that the activity was profitable for society. There are also other examples of corporations that had to entreat participation or cooperation from nonprofit organizations within programs that the corporation itself had planned. There have also been many activities where corporations build a cooperative relationship by dispatching employee volunteers to nonprofit organizations. One could characterize each of these instances as a partnership where the corporation supplies the aid and the nonprofit organization is supplied with aid. However, in the future, there is the probability that corporations and nonprofit organizations will be able to team up in solving societal problems as truly equal partners if only the societal infrastructure is laid out for nonprofit organizations and each nonprofit organization is able to fulfill its accountability requirements.
Truly new cooperative methods are already springing up. A certain automobile manufacturer joined in a partnership with nonprofit organizations with the aim of nurturing creative personnel. This manufacturer introduced a scholarship system whereby the corporation recruited students who wanted to work within nonprofit organizations, would choose the most promising applicants and supply scholarships to students based on their experiences and accomplishments. Of course, the corporation was not merely supplying scholarships as a recruiting strategy and neither were the nonprofit organizations accepting the students as ordinary labor. Both the corporation and the nonprofit organizations would supply resources and organizational abilities with the goal that the students would work at nonprofit organizations engaged in cutting-edge activities, gain abilities to think and act on their own and then leave the nest to venture into society. One should pay attention to the following points in building a partnership between corporations and nonprofit organizations like that which is seen in this scholarship system.

(1) Sharing a Joint Vision of Society within the Corporation

The most important point is for the corporation to clarify its ideals in regard to how it will exist with others within society and then have a societal vision of what kind of society the corporation wishes and how to attain that vision. It is not enough for management and personnel placed in charge of philanthropic activities to hold that societal vision. It is crucial to have employees and even stockholders share in those ideals and in that vision if the corporation is going to engage in philanthropic activities. In order to gain this understanding, it goes without saying that a corporation will have to write out its fundamental aims then use media such as internal memoranda, assign management to trumpet the aims and endeavor to gain a consensus among stockholders.
One representative of the effectiveness of this method is an office equipment manufacturer that wrote out in detail about its philanthropic activity within a management memorandum, explained its philanthropic activity at a general stockholder's meeting and gained the understanding of stockholders that a portion of stockholder dividends would be pooled in a fund to support the philanthropic activity.
The probabilities are that concrete problems which need to be solved will come into view once a corporation has elucidated its societal vision, gained the support of its members and then begins the process of making that vision into reality.

(2) Building a Partnership

As suggested by the phrase "there are only as many problems in society as there are nonprofit organizations," there are at least one and usually a number of existing nonprofit organizations which have unique and specialized abilities in grappling with any problem that a corporation might wish to solve. The personnel placed in charge of philanthropic activities only have to decide which nonprofit organization seems best suited to a partnership. While information about nonprofit organizations is still scattered and the organizations themselves are not skilled at making contacts, the personnel placed in charge of philanthropic activities have been either using networks between corporations or searching for potential partners by contacting nonprofit organizations directly. Especially apparent are signs that both corporations and nonprofit organizations are actively searching for connections. At an interchange meeting set up by personnel of a corporation involved in the 1% Club of Keidanren along with staff from nonprofit organizations, far more representatives than originally anticipated attended the meeting. These type of efforts will likely gain momentum and expand in scope from here on out.

(3) Activities which Make the Most of Possible Resources

A corporation and nonprofit organization which have built a partnership will develop concrete activities to address the problem at hand. The next crucial step is for both members of the partnership to bring all of the possible resources and abilities which they hold to the task. The corporation should not halt at a monetary donation alone, but should be able to use to best advantage all of its corporate resources including facilities, products and personnel. Likewise, the management at a nonprofit organization should not halt at cooperating within the concrete activity but should be able to take the initiative in directing how the corporation and corporate employees could most effectively aid the activity. Because of the fact that corporations and nonprofit organizations have many different characteristics, the management of a nonprofit organization should not wholly import the corporate style of doing things. However, a nonprofit organization should be able to support the ideas of enhanced accountability and greater disclosure of information.
Because a nonprofit organization will demonstrate its strengths when applying its specialized knowledge and skills and gather information by activating its various networks, everyone grappling with the problem will feel a greater sense of accomplishment and the activity has a better chance of enduring into the future.

(4) Evaluating an Activity and Disclosing Information

There is always the necessity of gaining the full understanding of everyone who has a stake in the project as the participants push ahead with the philanthropic activity. The participants will also have to analyze ceaselessly whether or not the activity is moving toward a realization of the societal vision which the corporation formulated.
Among corporations in Europe and America, there are many that have evaluation standards for philanthropic activities. There are also many examples of projects where the corporation pushes ahead with an activity while verifying what kind of influence its efforts are having on society or what kind of influence the efforts are having within the corporation itself. There are movements starting within Japan also for individual corporations to create these types of evaluation tools or guidelines which the corporation can use at its discretion.
Another crucial point in conjunction with evaluating activities is that both the corporation and the nonprofit organization must widely telegraph information concerning the activity to society at large. Only through presenting this information to society will other corporations and other nonprofit organizations holding the same awareness of a problem become aware of the activity. Thus, a wider range of cooperation becomes possible for the first time and the activity can expand in scope.

Home Page in English