亚洲公益论坛丨日本公益法人协会调查部主任研究员白石喜春：日本慈善组织的发展与挑战

导语

I am Yoshiharu Shiraishi, a research associate of the Japan Association of Charitable Organizations.

I'm very sorry that I will not be able to visit Hainan Island this time due to my busy schedule. When I got an offer from the Asia Academy of Philanthropy, I was excited about meeting with my closest friend, Mr. Huang Haoming, and I also heard that some of my colleagues from CANGO and others will be attending this forum. So I feel very sorry I could not meet you all. If there is another opportunity, I would like to share our experience with you through real participation next time, but I would make a speech online this time.

Let's share the slide screen with you. Just one moment. Our organization was established in 1972 with the mission to contribute to the sound development of PIC, which is helping the promotion of public welfare. Our annual revenue is around 250 million, 1.7 million USD and we have 1500 members and 25 employees, including Associate staff working at JACO. We have three activities such as development and promotion, operational support and capacity building, research and advocacy campaigning.

For centuries, religions have undertaken service projects, residents have engaged in community activities and businesses have participated in social activities. In Japan, charity became an institutionalized concept in 1896 by establishing the Public Interest Corporation system. Since then, various types of corporations have been established, such as private school corporations, social welfare corporations, religious corporations, medical corporations, and specified nonprofit corporations. These entities choose their corporate status based on the nature of their activities.

This table shows the number of legal entities for each legal entity. In contrast to the United Kingdom, the United States, Canada, and other countries, Japan has multiple legal entities within the same nonprofit corporation, and regulatory bodies for each legal entity differ.

This shows the characteristics of the public interest corporations: PICs and general nonprofit corporations: GNCs. The regulatory body for PICs is the Public Interest Commission, a third-party organization, and its secretariat is run by the Cabinet Office. However, there is no permitting body for GNC. A GNC can be established simply by registering at the registry office, and at the same time, receiving certain tax benefits. To become a PIC, you must be authorized by the Public Interest Commission, and once you become a PIC, you will get better tax benefits. This presentation will focus on PICs and a report on recent institutional developments.

For reference, the characteristics of other legal entities are also shown. These are social welfare corporations and private school corporations. This is religious corporations in medical corporations. This is a public charitable trust and approved community-based organization. These are relief and rehabilitation corporations and specified nonprofit corporations. Talking about PICs, the legal system was enacted in 1896 allowing associations or foundations related to scholarship, arts and crafts, charity, religion, and other public benefits that were not for profit to become PICs with the permission of the competent authorities. As I mentioned before, to obtain the legal entity of PIC, it is necessary to go through a two-step application process. However, many GNCs continue to operate as GNCs without obtaining public interest certification. This is because there is no regulatory body, so they are free to operate, there are no sizeable regulatory requirements, and they do not have to make numerous filings. I will explain the details of these two legal entities later.

I have indicated the General Incorporated Association and Foundation Law and Public Interest Certification Law for your reference. This is the details of the Public Interest Commission, the third-party organization, that authorizes PICs.

This is a table that shows the difference in regulation of the two legal entities. Please remember that the first step to becoming a PIC is to get a GNC. Most GNCs are happy to continue doing their charitable activities as GNCs, even if the tax benefit is not the best one. According to this table, there is no authority for GNCs and the activities of GNCs are not unregulated so GNCs can do any kind of activity. As indicated in this table, PICs need to set at least 1 auditor but for GNC, if they do not set a board of directors, they do not need to set an auditor. It explains how we can establish the PIC or GNC. Since time is short, I will not explain each item one by one, so it would be nice if you could read the slides later.

This table shows the taxation of PICs and GNCs. For the revenues from profit-making activities, it is taxable. However, for PICs, if profit-making activities are related to charitable purposes, revenues from those profit-making activities will be not taxable.

Donation tax is not available for GNCs, but PICs have good treatment in terms of donation tax benefits.

Last year, a panel of experts was established within the Cabinet Office to examine the current revision of the public interest corporation system. The panel was chaired by Ms. Amemiya, the President of JACO. In June of this year, the final report was released, and the details of the system's revision have been largely finalized.

Public interest corporations enjoy a more beneficial tax system than other legal entities, but they are subject to stringent regulatory requirements. These include three financial standards and a large number of paperwork or periodic filings, which is an immense burden for corporations.

The three financial standards are the principle of revenue and expenditure compensation, which states that a corporation must not make a surplus in its public interest activities. The second one is the idle property rule, which regulates the holding of retained earnings. The third one is the rule that more than 50% of income must be allocated to public interest purposes. These regulations severely restrict the growth of corporations and the development of public interest activities and are a major obstacle to the promotion of public interest by civil society organizations.

Although the recent system reform has resulted in deregulation in some places, it is still far from sufficient. The vast amount of periodic submissions and various procedures also impose a heavy burden on corporations, and although the revisions appear to streamline the process in some places, they are not sufficient. This is why we put forth the three policies shown on this slide in our final report. We are currently in the process of designing the system based on the final report of the expert panel. If all goes well, we plan to submit the revised bill to the Diet in 2023 and revise the system in 2025.

I have provided only a brief overview of the topics I've discussed. However, if you're interested, I'd be glad to elaborate more about these subjects when the opportunity arises.

Thank you very much.