The Nonprofit Review, Vol.16, No.1, 39–55 (2016)
JANPORA©2016〔特集論文〕

Excellent NPO Standards: Building Assessment Tool for NPOs in Japan
Yayoi Tanaka1)
National Institution for Academic Degrees and Quality Enhancement of Higher Education

1)

This paper aims to explain the design process and systematic structure of the evaluation criteria for an “Excellent NPO,” aswell as to discuss how the evaluation of a nonprofit organization (NPO) should be conducted as a measure for problem-­solving. The evaluation criteria were established by the practitioners and researchers, who sensed a crisis in the current situation of the NPO sector in Japan. First, the current situation was analyzed based on the data collected, and the desirable­image of an NPO was defined. Subsequently, the three problems of “citizenship,” “social innovation,” and “organization­stability,” which were determined to be the most important, were extracted and defined as the basic conditions. Based onthese basic conditions, the systematic structure and design process of the evaluation criteria were defined and discussions
were made according to the process, thereby resulting in 33 evaluation criteria. Therefore, these evaluation criteria can help
derive possible solutions for the problems faced in the NPO sector. However, in order for the evaluation to act as a problem-­solving measure, the evaluation itself should be considered as a project; moreover, continuous review of the evaluation­criteria, such as continuous analysis of the current situation and feedback from users, are necessary.
Key words: evaluation as problem-solving, excellent NPO, citizenship, social innovation, organization stability

cussed. Furthermore, the design process and systematic

1. Introduction

structure of the evaluation criteria are described.
Lastly, how evaluation is utilized for problem-solving are

Evaluation criteria for Excellent NPO are comprised of
33 evaluation criteria created by a group of practitioners

discussed.

and researchers who sensed a crisis in the current situationof Japan’s NPO sector. Returning to the grass roots of nonprofit organizations, these evaluation criteria were estab-

2. Evaluation of nonproﬁt organization

lished based on “citizenship”, “social innovation” and“organizational stability” which were defined as the basic

profit organizations in United States that has the long his-

conditions. In this sense, the criteria were designed to deal

tory in evaluation of nonprofit organizations are reviewed.

with the NPO sector’s problems.

During the course of dissemination, the evaluation approaches

First, the history and progress of dissemination of non-As the evaluation is expected to provide constructive les-for nonprofit organizations have become diversified andsons and advice, its problem-finding function is highlighted incomplex in United States; these evaluation approaches aremany cases. However, another aspect for the evaluation

divided and summarized into three categories.

exists that it mainly provides a direction and a prescription forproblem-solving. In this regard, this paper reviews a history

2.1. History of nonproﬁt organization evaluationand progress of the dissemination of nonprofit organizations

It is generally considered that a history of the evaluation

and refers to diversity of evaluation of nonprofit organiza-

of nonprofit organizations started in United States. The

tions. Then, the paper explains the evaluation focusing on

policy assessment in United States is said to start with the

problem-finding, as well as that on problem-solving.

program evaluation of education and social welfare underThis paper explains that the criteria for Excellent NPO

the “Great Society” policy. The large-scale foundations inare designed for evaluation for problem-solving, and sub-

United States kept pace with the policy and made a sig-

sequently clarify positioning of the criteria.

nificant amount of grants to development in poverty areas.

In addition, key concept and creating-process of the eval-

Subsequently, they gradually realized the necessity touation criteria for Excellent NPO are explained. First, thereview the effects of their grants. From 1970s, they earnestly

current situation and problems in the NPO sector are dis-commenced evaluation activities. For example, Manpower― 39 ―

The Nonprofit Review

Demonstration Research Cooperation, a US evaluation

Table 1 Management, audit and evaluation activities

organization, which was founded by contributions of the

N=189

Ford Foundation and others in late 1970s, conducted evalu-

Reporting activities

ations of the grant programs by governments and foundations (Tanaka 2005).
Large-sized grant making foundations and community
foundations conducted evaluations, which affected granted

Activities related
to legal mattersorganizations. Subsequently, evaluation was disseminatedto general nonprofit organizations.
Under these circumstances, research on evaluation for
nonprofit organizations and developments of evaluation

Monitoring

methodology took place. Both in 1995 and 1998, the Aspen

Creation of reports to a board
Creation of an annual business report
Reports to granting agencies
Accountings report to granting
agencies

94%
75%
71%

Accounting audit
Business audit
Qualification acquisition(Approval of business operation)

86%
71%

Undergoing of certification review

31%

Reviews of achievement results andevaluation on staff members

80%

Inspection of programs
Monitoring of program execution
On-site inspection by granting
agencies and governmental agencies

Institute, a US nonprofit think-tank, organized a study
group comprising stakeholders from nonprofit organizations
and evaluation researchers. The group announced “NewApproaches to Evaluation Community Initiatives” (volume

Management
Strategy

1 published in 1995 and volume 2 in 1998) in order to dis-

Check of consistency between
purposes/targets and programs

70%

35%

77%
69%
55%
67%
57%

tions. Independent Sector (1998), a nonprofit organization

Establishment of achievement targets
Decision of strategic plans as formal
items

specialized in policy advice and a US forum organization,

Use of Balanced Scorecard

5%

Execution of program evaluation
Execution of achievement
measurement

55%

Creation of a logic model

23%

cuss appropriate evaluation methods for nonprofit organiza-

published “Evaluation with Power”, in which evaluation

Evaluation andachievement
assessment

methods and procedures for nonprofit organizations are
explained in detail.
In 1993 and 1999, the Peter Drucker Foundation for Non-

47%

46%

Source: Carman and Fredericks (2008: 57)

profit Management published a “Self-Assessment Tool for
Nonprofit Management,” which has been disseminated as awith consideration of balance” (46%), and “evaluating all

management assessment tool for nonprofit organizations

programs” (18%). Based on the subject results, 90% of

not only in United States but also in many other countries.

respondents conducted evaluations. Only 10% of respon-

The W. K. Kellogg Foundation is a foundation that makes

dents did not evaluate, comprising “not evaluating at all”

grants to US community activities and foreign NGOs. The(5%), and “hardly evaluating” (5%).

foundation requires the granted groups to conduct evalua-

Table 1 shows the responses on the questions that ask

tion on their activities and separately covers expenses asso-

about implementation of various evaluation-related activi-

ciated with such evaluation activities. In addition, trainings

ties. From a wide perspective of the review of organizationfor evaluation activities and related information have been

management, in addition to the program evaluation, publi-

provided to those eligible for grants. As a part of the activi-

cation of annual reports and submission of reports to a board

ties, the foundation published “Evaluation Handbook” inand granting agencies were included in scope of the survey.

1998, widely utilized by those eligible for grants and by

In case of the evaluation for nonprofit organizations, whenthose in the NPO sector and researchers.

evaluation of nonprofit organizations is discussed, it is

In 21st century, evaluation has become a part of regularunderstood from Table 1 that evaluations on projects andactivities for the US nonprofit organizations. Carman andprograms as well as monitoring and management assess-Fredericks (2008) conducted a survey on nonprofit organi-ment are included in the scope of evaluation.

zations in the State of Indiana and analyzed the status ofevaluation activities.1 The answers for implementation of

2.2. Diversiﬁed aspects of the evaluation for nonproﬁtorganizations

evaluations are “sometimes evaluating” (26%), “evaluating
1

Number of the samples was 189, which was a limited number. However, the sample was well balanced in the scale of organizations andfields of activities.

As shown in Table 1, for nonprofit organizations, evaluation means wide-ranging concept that includes not only theevaluation of programs and projects but also assessment of― 40 ―

Excellent NPO Standards
Table 2 Types of evaluations for nonprofit organizations
Program and project evaluation

Buildup and support for management power

Code of conduct“Process evaluation”
Program theory, program theory, etc.

“Plannning”• Drucker’s self-assessment method”• Strategic Planning“Codes and charters of conduct”
Code of Conduct, Code of Ethics“Nonpolitical nature and nonreligious nature”• The Genron NPO (based on the guideline of
the Internal Revenue Service in US)• “Log frame (PCM)”• “Cost benefit”
cost-benefit analysis, cost-effectivenessanalysis• “Scientific evaluation”“Quasi-experimental mode”
Randam experimental method, Impact
evaluation, regression and decoupling modeland general index model“Progress management”• Performance measurement“gift acceptance policy”“Financial analysis”“Cinrehensiveness”• Balanced Scorecard

Source: Created by the author

management and determination of strategic plans.

advantage over others, and determined their strategic plan

In regard to project evaluation to assess effects of granted

in use of the Strategic Planning approach (Tanaka 2005).

projects and programs, project evaluation possibly started

Kaplan, a financial scholar, proposed the assessment tool

on request from granting foundations and administrative

for non-financial aspect, i.e., Balanced Scorecard (BSC),

agencies. Therefore, following program evaluation by theindicating that mere evaluation of the financial aspect wasgovernment, nonprofit organizations conducted on-site data

not sufficient. Focusing on non-financial aspects, BSC has

collection and monitoring activities as the subjects forbeen widely disseminated among governmental agencies

experimental and quasi-experimental evaluations.

and private nonprofit organizations. Kaplan and Norton

However, as described earlier, many books on program(2004) explained its application method for nonprofit orga-

evaluations for nonprofit organizations, published since
1990s, focused on theory evaluations. Connell et al. (1995)

nizations in their book of “Strategy Maps: Converting Intangible Assets into Tangible Outcomes”.

noted that scientific evaluation that measures and proves

There is also an evaluation method whose main purpose

effects of projects by forming comparative experimentis to show the code of conduct and eligibility of organiza-groups, tended to exclude viewpoints other than assump-

tions for the society. InterAction (2014), an NGO’s associa-

tions by evaluators as well as initiatives of people attempt-

tion in the United States, announced “People’s Voluntary

ing to solve communal problems from an evaluation view-

Organization (PVO) Standards”, showing the code of con-point. Therefore, such evaluation was indicated to be notfully appropriate for nonprofit organizations. Then, it is also

duct for members. These are called “Code of Conduct” and“Code of Ethics” and presented by a number of NGOs,

indicated that, to respect initiatives of people in a commu-

regardless of their fields and nationalities (Tanaka 2005).

nity, the method of theory evaluation developed by Weiss in1970s was more appropriate.

Table 2 shows a list of the above-described evaluation
approaches for nonprofit organizations. The program evalu-

In addition, evaluation methods based on business admin-

ation targets projects, while the management assessment

istration have been widely disseminated among nonprofit

tools are designed for both projects and organizational man-organizations. P.F. Drucker Foundation’s Self-Assessment

agement. As for the code of conduct, many of them focus

Tool for Nonprofit Organization, that was created based on

on organizational management and governance.

Drucker’s management philosophy and announced in 1993
and 1999, introduced thinking-process to extract an organi-2.3. Evaluation and problem-solving

zation’s innovation power by setting five questions for theevaluation.

According to Patton (1997), there were three purposes
for evaluation, consisting of judgment, improvement andStrategic Planning was the method developed based on

knowledge creation. However, in many cases, nonprofit

Porter’s (1980) competitive strategy. Initially, the approachorganizations emphasize the advantages of improvement

was used by businesses, gradually being applied to non-from evaluation. In other words, they identify the solution

profit organizations. For example, the Cleveland Founda-

after finding problems in their activities and organizationaltion, that had the longest history as a community foundation

management.

in United States, analyzed historical achievements and their― 41 ―

Then, considering evaluation as an approach for problem-

The Nonprofit Review

solving, what type of characteristics can be identified? In thethe circumstances where the Ministry of Foreign Affairs

following, evaluations from two perspectives, that is, problem-

launched evaluation of NGOs, when illegal processing offinding and exploring problem-solving are explained.2

subsidies granted to NGOs by the Ministry was identified
and the Ministry attempted to address such scandal. In the(1) Evaluation as problem-ﬁnding

face of such situation, NGOs considered that they should

The project evaluation and program evaluation confirm
achievement-status of the purpose and clarify successcreate their own criteria and launched the NGO Accountability Criteria.

factors and problems. In evaluation-reporting activities,

Japan NPO Center’s “Seven Criteria for Creditable NPOs”

lessons and advice are considered important as the evalua-

was created, when the NPO scandal was frequently reportedtion reveals problems related to the project operation. In

by mass media. The code of conduct was established by thethis sense, project evaluation is considered as a trigger forNPOs with awareness of problems in the situation.

those being evaluated to identify problems.

Such code of conduct was produced to cope with credit-

The evaluation approach derived from business adminis-

ability and accountability problems which the nonprofit

tration aims at management assessment, so that the method

sector historically faced. Nonprofit organizations attempted

is designed to point out problems in organizational manage-

to recover and secure credibility by showing their abidance

ment. P.F. Drucker Foundation’s Self-Assessment Tool isby the code. In this sense, code of conduct is considered tothe thinking-support tool that helps organizations identify

be a type of evaluation to indicate the direction for solving

the opportunity for innovation by understanding the gap

the problems that nonprofit organizations face.

among mission, achievement of nonprofit organizations,and needs of customers (Drucker and Stern 1999). BSC is(3) “Evaluation criteria for Excellent NPO” as problem-the logical-thinking-support tool that enables an organiza-

solvingtion to find its own strength and weakness through com-

In case of the 33 criteria for Excellent NPO, its purpose

parison with others and to set the achievement goal for theis problem-solving and improvement. As the backgroundnext term. Both approaches share characteristics in helping

for creation of the evaluation criteria for Excellent NPO, aan organization to compare its own mission and achieve-sense of crisis was shared on the situation of Japan’s NPO

ment, with those of others, and to identify problems.

sector and a sense of urgency was also shared to take action
for quality improvement in the NPOs activities and their(2) Evaluation as problem-solvingorganizational management.

There is also an evaluation method focusing on problem-

In order to comprehend a sense of crisis in detail, study

solving. PVO Standards by INTERACTION and Account-on financial database and survey was conducted. Analysis

ability Criteria by Japan NGO Center for International

was conducted on the NPO sector’s current situation in

Cooperation (JANIC) (website), and “Seven Criteria fororder to extract three problems. That is, NPO could not be

Creditable NPOs” by Japan NPO Center (website) present

fully the absorber of the citizen’s demands; they lacked

code of ethics and conduct for non-profit organizations. The

problem-finding and ability for innovation, although they

purpose of these evaluations is to demonstrate the organiza-

wished to be engaged in social change; and they faced orga-

tion’s abidance to the criteria of a society and secure its

nizational issues which resulted in organizations’ instability.

creditability. Background for the codes and criteria indi-

Based on these three problems, “citizenship”, “social

cates that nonprofit organizations faced the problems that

innovation” and “organization stability” were set as basic

threatened their social positions.

element and criteria were established.

The PVO Standards were created after the NGO scandal

In this sense, evaluation criteria for the Excellent NPO

that involved the ODA fund in 1980s. In order to address

attempt to address problems extracted from the current

such scandal, NGOs established the PVO Standards

status of the NPO sector and present solutions.

through eight years of standardization activity.

In the following section, the current situation and prob-

JANIC’s NGO Accountability Criteria took place under2

Single evaluation activity has both sides of problem-finding andproblem-solving. This paper focuses on and discusses major characteristics.

lems in Japan’s NPO sector are described. Furthermore, thestructure and designing-process of the evaluation criteria
for Excellent NPO are explained.

― 42 ―

Excellent NPO Standards

Figure 1 Distribution of NPO’s income scale (FY 2008)
Source: Cabinet Office (2010)

Figure 2 Distribution of net assets in nonprofit organizations (FY 2008)
Source: Cabinet Office (2010)

tribution shows an almost similar trend to the national NPO

3. Current situation and problems of Japan’s NPO
Sectorfinancial database (FY 2003) retained by Osaka University.
Small-sized organizations accounted for more than 60 per-In Japan, “Law to Promote Specified Nonprofit Activities

cent, being a majority of the sector.

(NPO Law)” was established in 1998 with the aim of pro-

The “Basic survey for citizen activity groups in FY 2009

motion for spontaneous contribution activities to a societyby the Cabinet Office (2010)” asked a question on the prob-

among citizens. The number of NPOs was 41,171 as of thelems faced by the NPOs for their sustainable management.

end of October, 2010, growing to become a single sector.

The largest problem was “securing human resources”

However, a major problem is identified through analysis of(64.7%), followed by “diversification of income source”

the sector’s current status.

(56.9%) and “enhancement of PR activities” (47.1%). Problems in human resources, funds and PR were also revealed

3.1. Problems related to organizational managementin the historical survey by the Cabinet Office in 2005; these

Figure 1 shows the distribution of NPOs’ income scale

problems have been difficult to solve.

based on the survey by the Cabinet Office (2010). This dis― 43 ―Financial sustainability is also a large problem. Figure 2

The Nonprofit Review

Figure 3 Distribution of donation to NPOs (FY2008)
Source: Cabinet Office (2010)is the distribution of net assets. The figure exhibits internalversity) including 12,590 organizations, 54.5% of organiza-

reserve which is indispensable for new projects, projecttions answered “no donation”. The comparison is difficult

expansion and contingency. However, 12.3% of organiza-

due to the different sample size in both activities. However,tions showing minus figures, faced asset deficiency. Look-these figures indicate that the situation is far from being

ing at increased and decreased amounts of net assets, 32.8%

improved as the ratio of donation to all income becomesof them reported negative figures. That is, more than 30%

smaller.

of organizations covered the deficits by reducing theirinternal reserves.

With respect to member fees, 42.6% of the organizations,the highest ratio of the respondents, answered “more than 1
yen to not more than 200,000 yen”. The respondents with

3.2. Relationship with citizens

the answer, more than 0 yen to not more than one million

Nonprofit organizations play roles as “human-changeyen, accounted for 83%. Compared with donation, member

agents” to cope with social needs through provision of theirfees were collected to higher extent. However, the ratio togoods and services as well as “creator of citizenship” by

all income is as low as 6.8%.

providing citizens with the participation-opportunity through(2) Volunteer

the organizations’ activities (Drucker 1995).
Relationship with citizens in this paper focuses on role as“creator of citizenship”.

The “Survey on NPO’s Role in Social Innovation4 ” was4(1) Citizen’s participation
Figure 3 shows the distribution of donations. 47.2% oforganizations reported “no donation”. This indicates that
almost half of the organizations did not receive the donation
at all. In addition, the average rate of the donation to all
income accounted for 5.5% of yearly income.3 Incidentally,
according to national NPO financial database (Osaka Uni3

Refer to the described data of statistics of the Cabinet Office (2010).
― 44 ―“Survey on NPO’s Role in Social innovation” was the survey conducted by a study group to work out evaluation criteria for nonprofit
organization.
(1) Purpose of the survey
The purpose of the survey was to confirm how the distance or thecommon point was between “a desirable image of NPO” discussed
by a study group to work out evaluation criteria for nonprofit organizations and the current situation of the NPO sector.
Therefore, the survey sheet was designed based on the discussion
and evaluation criteria produced by the group for desirable nonprofit
organizations.
(2) Survey period
Survey started from November 29, 2009, of which collection period was two weeks. ↗

Excellent NPO Standards

conducted in 2009 by a study group for evaluation criteria

tions that did not submit the report was 1,260 from 2006 to

for the nonprofit organization led by the author. The survey

2008. When this figure is divided by the aforementioned

asked the number of the paid volunteer workers5 and unpaid

total number of the organizations in 2008 the non-volunteer workers. More than 20% of the organizations

submission rate is 21.2%. In Kanagawa Prefecture whichanswered zero volunteers in either paid or unpaid status.

has the second largest number of NPOs next to Tokyo, the

15.8% of all the respondents answered that there were nonon-submission rate is also more than 20%.
In addition, the NPO system is increasingly utilized withvolunteer workers both paid and unpaid.
Donations and volunteer activities are very important for
nonprofit organizations as a financial source and labor

different purposes from those of “social contribution by
citizens” as defined under the NPO Law.

source, respectively. Also, donation and volunteer activities

Figure 4 shows the answers for the question on theare meaningful approaches for citizens to be involved infounders of NPOs. The answers were as follows: 70% of

contribution activities to the society. However, the data

answers are comprised of “citizens (individual)” (28.3%)

regarding donations and volunteer activities show thatand “former voluntary association” (42.7%). Remaining

many nonprofit organizations could not fully provide the

30% answered as follows: “local governments (cities,

participation opportunity for citizens.

wards, towns and villages)” (4.2%), “local governments(prefectures)” (2.8%), “other nonprofit organizations such(3) Problems of credibility

as social welfare corporations” (3.6%), “corporate enter-

What do citizens think about NPOs? The Public Rela-prises” (3.3%), “public interest corporations” (2.5%), etc.

tions Office of the Cabinet Office (2005) conducted “Public

The purpose of the NPO Law is to promote free social

Survey on NPOs (nonprofit organizations).” It asked thecontribution activities among citizens. It was establishedcredibility of NPOs. The survey showed that 6.5% answered“credible” and 24.0% answered “almost credible”. Although

based on the scenario that volunteer groups and voluntary

the mission and purposes of NPOs are social contribution

would utilize the corporation system. Therefore, it was

activities, nearly 70% did not answer “credible.”established with no high requirements for certification so

The above-mentioned answers are based on several reasons. For example, NPOs, as a certified organization, arecitizen groups in the absence of a recognized legal statusthat the maximum number of people would be able to utilize the system.

required to submit a business report to the governmental

Generally, the NPO corporation system is considered toagency in charge. In Tokyo, Fifteen percent of all nonprofit

be a simple system in establishing a corporation. Suchorganizations are located in Tokyo. Their report-submission

image enables various bodies to employ the NPO corpora-rate was as follows: The number of obliged organizations totion system. For example, retired government employees

report was 5,933 as of 2008, while the number of the orga-

are organized to provide contract work for the public sector.

nizations that submitted no reports was 985, resulting in the

NPO may easily receive subsidies. As a part of marketing,non-submission rate of 16.6%. Furthermore, the Tokyo

corporate enterprises establish an NPO corporation. Although

Municipal Government sent submission reminder to theall of the subject respondents do not belong to these cases,

corporations which did not submit the report at least once

the figure of 30% implies that these trends are being

for the past three business years. The number of organiza-

increased.

↘ (3) Surveyed organizations
Surveyed organizations were selected by the following methods.
First, the organizations with their current balance of not less than 5
million yen were selected from the NPO financial database publishedby Osaka University. (It covers 15,000 NPOs at fiscal year of 2003,
which covered 87% of the number of then NPO corporations.) Furthermore, the organizations were randomly selected by districts, byscales and by fields. Finally, 2,000 organizations were selected. The
survey sheets were sent to these 2,000 organizations.
The number of respondents was 361 and the response rate was
18.0%.
5
Paid volunteers is the one to whom a small value is paid for theirprovided works. The amount is set not more than the minimum wage
in many cases.

Figure 5 shows the results in relation to the question on theThen, what is the NPOs’ evaluation on themselves?
NPOs own evaluation. NPOs “contribute to the society”(57.6%), “contribute to vitalization of civil society”(63.2%), and “develop themselves” (61.8%). As shown inthese answers, respondents answered positively, however,in regard to the social position, the negative answers(30.4%) exceeded the positive answers (11.6%). The number of the organizations operating with mixed purposes
other than contribution to society has increased (44.3%).
The subcontracting cases have increased (33.5%). The― 45 ―

The Nonprofit Review

Figure 4 The body that initially established and provided infrastructure, n=316
Source: Created by the author

Figure 5 NPO’s self-evaluation of the NPO sector, n=316
Source: Created by the author

cases of becoming a profit-making organization have

Tokyo, multiple corporations were growing rapidly in theirincreased (26.3%).

size whithin a short period. Reviewing these corporations

As for the aforementioned problems of NPO establish-

through their homepages, it is understood that those werement, NPOs themselves have realized the problems that

established by medical corporations, religious corporations,poorly qualified NPOs are present.

public interest corporations, etc. The relationship between

When analyzing the panel data on NPO corporations in6establishment of many of these organizations and the purpose of the NPO Law was unclear.

6

Financial data of 157 organizations were monitored by Tokyo
Municipal Government for 7 years from 2000 to 2006.

As NPOs with different purposes from those intended in
the NPO Law has more inﬂuence, the fundamental purpose― 46 ―

Excellent NPO Standardsof NPO Law is more and more difficult to be perceived;
NPOs tend to lose their credibility.

A question on the mid-to long-term plan was also present
in the questionnaire. Although 19.1% of the organizations

Speed of enhancement of its ability for problem-solving

had the authorized mid-term plan, 23% of them hadwithin the NPO sector are overwhelmed by change in exter-

unofficial plans shared at the secretariat level. Under thenal inﬂuences. Therefore, the issue of credibility appeared

financially difficult situation, setting the mid- to long-term

to become more complex (Tanaka 2010).

plans is not easy. It is clear that a majority of organizations
did not have the mid- to long- term plans. Considering

3.3. Renovation problems

complexity and scale of the issues that NPOs tackle, mid-

No clear definition exists for innovation. Also, its evalua-

to long- term perspectives are indispensable. To solve thetion is difficult. However, various researches have beensocial problem, NPOs do not yet have the sufficient condi-

conducted for organizational circumstances and conditions

tions for facilitating and achieving “social innovation.”

which lead to innovation and renovation. Drucker (2006)
mentioned, “there are, of course, innovations that spring

3.4. Structured NPO’s problems: Declination toward
the public administration and market

from a flash of genius. Most innovations, however, especially the successful ones, result from a conscious, purpose-

The above-mentioned three problems (organizational

ful search for innovation opportunity” (2006: 352). In otheroperation, relationship with citizens and renovation) andwords, his remarks mean that those who realize the innova-

two relationships surrounding NPOs, that is, declination

tion possess a way of systematic thinking and a behavioral

toward the public administration and declination toward

process to implement PDCA. Hence, it is also necessary formarkets and quasi-markets are mingled in a complicatednonprofit organizations to set conditions for innovation bymanner. Subsequently, problems appear to become structured.

implementing PDCA and continuous learning. Also, it is

These two declination cases arise when the organizations

desirable that nonprofit organizations set their goal at thesought funds from the public administration and profit-

outcome level, affecting target people and areas, based on

making projects to stabilize organizational management. As

their mission. In order to make such situation take place,a result, NPOs’ function to provide citizens with the oppor-

planning based on mid- to long-term perspective is necessary.

tunity for participation do not work properly and the organi-

Analysis of data based on such perspectives suggests thatzations lose connection with citizens.

NPOs have the desire and hope to implement social innovation. In reality, however, they face large barriers to overcome.

(1) Problem of subcontractor for public administration

In “Survey on NPO’s Role in Social Innovation” noted in

The first problem is acting as a “subcontractor for public

earlier section, a question was asked whether NPOs had

administration”. In the above-mentioned survey, the rela-started new projects or modified their existing projects intionship with various organizations surrounding NPOs was

the past three years. More than 55% of them answered “yes”,

asked with 5 stages from cooperation to conﬂict. The answers

while 44% answered “no”. Although the questionnaire-

were as follows: The organizations which were “in cooper-

based survey contains limitation and the detailed interview

ation with” NPOs were local governments (69.3%), massis desirable, 40% or more of the organizations felt that they

media (49.6%), universities and research institutions

did not conduct improvement or modification.

(47.1%) and NPOs operating in the same field (44.0%).

Also, the survey asked where the organizations conduct

This result shows that they had strong cooperative relation-

evaluation. Implementing the “project evaluation” (54.5%)

ship with local governments. Also, the relationship withexceeded conducting “regular check (monitoring)” (48.2%).

autonomy was asked. Many of NPOs were under contract

In the absence of basic information from the regular check,with public administration.

implementation of the project evaluation is generally diffi-

Such relationship with public administration inﬂuenced

cult. Therefore, this answer results appear to contain contra-

NPO’s income composition greatly. “Basic Survey for

diction. Probably, increased numbers of the organizations

Citizen Activity Groups by the Cabinet Office (2010)”

realize that evaluation is necessary to be conducted andshowed that a ratio of earned income of NPOs accounted

attempt to implement it. However, their knowledge andfor 74.5% and that 63.9% of the income came from con-understanding are limited, which appears to lead to thesignment works by public administration. When combining

survey result.

income of consignment and public subsidies, it is estimated― 47 ―

The Nonprofit Review

Figure 6 Causal model related to NPO’s financial sustainability 8
Source: Tanaka et al. 2010, translated by the authorthat 63% of the entire income came from public fund.

described earlier, 74.5% of income come from projects.

However, in light of NPO’s governance and independence, disproportionate reliance on a specific fund causes a
risk.
“Survey on NPO’s Role in Social Innovation” asked the

And its rate tends to increase (Cabinet Office 2010). There
are two reasons in this trend.
First, there was stronger tendency toward becoming asocial enterprise and a project-type NPO.

question about whether organizations had the policy for

Second, 60 to 80% of entire income came from con-receiving contract and subsidies. Half of organizations con-tracted work from public administration. The influence

duct contractwork and receive subsidies with condition thatfrom the relationship with public administration is identi-

the works follows the NPO’s purposes and policies.

fied here.

On the other hand, 23% answered that they had no rules
and 17.2% answered that they did not set any special rules,

However, excessive rely on the earned income. Thisphenomena causes three large problems.

because they proactively wanted to receive such offers.

The first problem is that, as the organization seeks profit-

When NPOs receive trust money and subsidies loosely andability and focuses heavily on the earned income projects,

rulelessly, problems of subcontracting are likely to arise.

the problems arise such as how NPOs cope with needs from

With inﬂuence of the budget cut in administrative expenses

people who cannot pay for them.

and the utilization of the private-sector, contract with the

The second problem is that the issue related to financial

private sector at low prices increase. As a result, NPOs

sustainability is noted. As for 157 organizations under the

become the absorber of those offers. If NPOs continue tocontrol of Tokyo Metropolitan Government, 7 years ofreceive contract offers under financially instable circum-

financial data are reviewed to analyze resources contri-

stances, their activities will result in a patchwork situation

buting to financial sustainability and their routes. In par-of subcontracting works.

ticular, a financial index is developed and calculated toSeven characteristics are identified in the subcontracting

review rank correlation between each income resource andsituation (Tanaka 2006). In particular, the largest problem

financial index.7 From this result, the assumption on thelies in that nonprofit organizations do not cultivate newroute to financial sustainability is introduced. Based on thisprojects besides the contracted projects. This causes diffi-

assumption, the model shown in Figure 6 is introduced byculty in identifying new needs. Also, they do not find vol-covariance-structure based analysis. The model indicates

unteers and donors. The former case means that NPOs losethat earned income contributes to expansion of the income

the source by which NPOs voluntarily find the problems

scale. However, the income negatively relates with sustain-

and become innovative. The latter case means that NPOs
separate themselves from the function that they provide
citizens with participation opportunity and nurturance of
citizenship.
(2) Relationship with markets and quasi-markets
As for the composition of NPOs’ average income, as

The types of income were total current revenues, member fees, donations, earned income and administrative subsidies. Financial indexes
were payable terms, a net asset/income ratio, a rate of earning,income diversity and a social support/income ratio.
8
Goodness of fit for causal model is as follows. There are good values
such as GFI=0.964, AGFI = 0.886, and RMSEA = 0.093. Also, an
acceptable model with values of chi-square value = 20.28 and pvalue = 0.16 was led.
7

― 48 ―

Excellent NPO Standards

ability. On the other hand, it is identified that diversified

profit organization. We reached the following conclusion

income sources (donations and member fees) besides theafter the discussion based on the discipline of a nonprofit

earned income may contribute more to financial sustain-organization theory and experiences of practitioners.

ability (Tanaka et al. 2010).
This result implies that excessive reliance on earned“With the mission, nonprofit organizations challenge

income threatens financial sustainability. Two reasons aresocial problems and obtain wide participation fromconsidered for this implication. One reason is that contract

citizens, achieve substantial results. For this, they

income from public administration is set at low prices,maintain necessary organizational stability and renova-

which accounts for 60 to 80% of the earned income. Thetion at a certain level, as a responsible activity parent

other reason lies in a problem related to the area in which

body.”

NPOs are engaged. Profitability of the quasi-market such as
educational and medical areas is low. In this sense, an alarmis raised over the simplified discussion that “business cer-This definition frequently has received comments such as“it is a common practice.”10 Surely, the definition explains

tainly saves a society.”9the basic elements of a private nonprofit organization. How-

The third problem is the tendency that volunteer works

ever, at present, Japan’s NPO sector tends to separate itself

and donations tend to be separated as inefficient resources.

from such basic status. We name NPOs in an effort to be

Finding and coordinating volunteers and donors require

desirable organization, “Excellent NPO.”

significant efforts. Therefore, if considering volunteer anddonation as mere labor force and financial resources, those

4.2. Design of the evaluation criteria

resources would appear to be considered as inefficient

To become an “Excellent NPO”, the guideline to realize

resources. In other words, when excessively relying on

this was required. To create the guideline, design for evalu-

profit-generating projects and focusing on efficiency foration criteria was conducted.

economic return, NPOs separate themselves from fostering
citizenship.

The following process was designed (Figure 7). Threebasic conditions were set based on the earlier mentioned

A common aspect between the issue of being a sub-criteria for “Excellent NPO” and analysis results of thecontractor for the public administration and the issue of

nonprofit sector. Those were three basic conditions thatcommercialization is to drive NPOs away from its function

consist of “citizenship”, “social innovation” and “organiza-

to be provider for citizens’ participating-opportunity. Whiletion stability”. To confirm the achievement degree of these

NPO’s credibility is being lowered, if NPOs keep them-basic conditions, criteria for judgment were considered.

selves distant from citizens, they would fail in fulfilling

In creating the evaluation criteria, the “Evaluation View-

their fundamental function to be leader for a civil society.

point” is set for each basic condition. “Evaluation Viewpoint” was chosen as an indispensable and important theme

4. Design and structure of the evaluation criteria for
Excellent NPO
Practitioners and researchers of NPOs, NGOs and public

in order that three criteria would fulfill the conditions. Next,
type of elements necessary to fulfill the three basic conditions was considered. Such elements were the evaluation
items.

interest corporations sensing a crisis about these circum-

Further, based on “Evaluation Viewpoint”, the study groupstances gathered and formed a study group to determine a

discussed which condition should be fulfilled by each eval-desirable image of a nonprofit organization to a society.

uation item to realize the favorable situation. Then, the rule

Evaluation criteria were selected.

was set to proceed with the discussion. In other words, atthe beginning of the discussion, NPOs and NGOs mainly

4.1. Deﬁnition of a desirable image of a nonproﬁttalked about their experiences and opinions based on theorganization

9

viewpoint and items of evaluation. Researchers only con-

The first activity was defining a desirable image of a non-centrated on summarizing what they mentioned. Researchers

This type of discussion was noted in media reports for social corporations and remarks from a BOP study group of the Ministry of
Economy, Trade and Industry.

10― 49 ―

When I received the interview from Yuzuru Tsuboi, Editorial Writerof the Asahi Shimbun, he mentioned that this definition was quite
common for NPOs and obvious.

The Nonprofit Review

tion but for their own knowledge. Therefore, when there isa place where people can utilize their knowledge, they
aggressively change their workplace. The working place towhich such ﬂexible workers go is provided not by corporations but by nonprofit organizations. Modern society has
become highly systematized. Therefore, only a few people
are involved in the policy decision making process. But as avolunteer of a nonprofit organization, volunteers related
that they could realize their own contribution to solve thesocial problems.
For nonprofit organizations, their role to open participation opportunity for citizens is indispensable. Also, it isimportant that each participant makes progress as a citizen.
With such self-awareness, nonprofit organizations will funcFigure 7 Process of creating the evaluation criteria for “Excellent NPO”
Source: Created by the author

tion as a socially important role for “citizenship creation”.
(2) Social innovation

extracted the essences from the practitioners’ experiences

As described in 3.3. “renovation”, defining renovationand summarized them by versatile and simple sentences.

and social innovation is difficult, because there is no abso-

Those sentences became the evaluation criteria, from whichlute definition and standard. But here, with reference to33 evaluation criteria was created and completed as theKorten’s “NGO’s growth and development theory” (1990),

evaluation criteria of “Excellent NPO” (Genron NPO 2010).

the definition of social innovation is as follows.

Self-assessment items were designed to enable selfinspection on whether evaluation criteria were fulfilled. To“For the social problems, the effect of proposal for

grade the self-assessment results, the answers of Yes/No or

the solution in view of causes and its execution dis-A, B and C were set and their assessment basis were

seminate widely in the society. As a result, people’s

described.

quality of life and form of behavior dramaticallychange.”4.3. Three basic conditions
Three basic conditions and evaluation viewpoints are
explained in the following sections.

When using the term, “innovation”, it is considered toaccompany a certain level of extent and expansion. However, there is no definition in extent and expansion. But in(1) Citizenshipgeneral, nation-wide and cross-border influences are fre-Citizenship means: Activities of nonprofit organizations

quently envisioned. To realize such broad social inﬂuence,

are widely open to the citizens. The opportunity of partici-social systems such as traditional practices and system are

pation is provided to them. Furthermore, their participation

required to change in many cases. In addition to the pro-enables each of the participating citizens to raise their sense

vision of social services, advocacy activities to seek forof citizenship and become a better person.

changes in systems and policies are important. However,

Evaluation viewpoint for citizenship is “participation andnonprofit organizations’ advocacy activities including

growth.” This concept is based on P.F. Drucker’s thought

advice to the administrative governmental organizations

on nonprofit organizations. Drucker pointed out that in anshould definitely gain support from citizens. Therefore,

intellectual society with a highly systematized economic

nonprofit organizations should work on getting understand-and social system, citizens’ participation in the society as

ing from citizens. Such advocacy activities are called“Advocacy of Social Justice” (Cohen et al. 2001). Advocacy

a foothold and the role of a nonprofit organization for“citizenship creation” became important.
In an intellectual society, people work based on their
obtained knowledge. They feel loyalty not for the organiza-

activities are done by private nonprofit organizations which
are not selected by election. Therefore, their legitimacy
depends on citizens’ support.

― 50 ―

Excellent NPO Standards

The evaluation viewpoint of social innovation is “problem-

tions and evaluation viewpoint are explained. Also, as thesolving”. The mission of nonprofit organizations is to solve

criteria are designed to be systematic, covering basic con-social problems through their activities. When social inno-

ditions to self-assessment items, overview of such arevation is kept in mind, bringing social systems into view,

explained.

tackling problem solution and disseminating the solution(1) Evaluation items for citizenshipmethod and effect are required.
solving from the mid- to long- term viewpoints, and that a

Evaluation items for citizenship include “donation”,“volunteer” and “self-awareness”.

series of the process from addressing the problems to explo-

Nonprofit organizations provide citizens with the oppor-

ration of the solution method is designed to evolve andtunity for participation in various concrete methods. The

develop this process.

typical methods are “donation” and “volunteer works”.

Therefore, it is necessary that the target is set for problem-

Here, the words “donation” and “volunteer”, are used in a(3) Organization stability

broader sense, which include member fees without con-

For organization stability, achieving the organizational

sideration and paid volunteer and interns respectively.

mission and purposes requires sustainable activities at a

Nonprofit organizations should not regard donation as

certain level. At the same time, nonprofit organizations

financial resources and volunteers as workforce. The organi-should not be satisfied with the contents and methods ofzations should regard donors and volunteers as their partici-

their current activities. They should foresee changes inpants. For that purpose, organizations should explain theirsubjects of activities and social environments, conduct

missions and purposes, facilitate the participation method

continuous reviews, and renovate their activities and orga-

suitable for the participants’ wishes and convenience, reportnizations with creative and problem finding ability.

the progress and results of their activities, and show their

The viewpoint of organization stability is “sustainableappreciation and gratitude to them.

development.” Many of the problems they tackle are intrac-

People engaged in nonprofit organizations’ operations

table and time-consuming. Therefore, organizations should

should have a sense of self-awareness that their organiza-

work on the problems from amid- to long- term perspective.

tions provide the citizens with the opportunity of growthAlso, credibility is required to gain support and partici-

through participation and share the opportunity. Therefore,“self-awareness” is included in evaluation items.

pation from citizens. Therefore, organization stability at a
certain level is necessary.
Only aiming at becoming a going concern is not appro-(2) Evaluation items for social innovation

against the self-purpose of nonprofit organizations for being

Evaluation items are “recognition of problems”, “method”,“ability”, “advocacy” and “independence”.

a going concern. Also, he pointed out that the organization

These items were designed to assume the story in whichshould be dissolved at the completion of their mission. The

nonprofit organizations would recognize and solve theirreason was not only that their human and financial
resources were wasted but also that the society was badly

own problems.
“Recognition of problems” starts from recognizing theinﬂuenced.

immediate needs. Looking at the background causes andpriate. Drucker (P.F. Drucker Foundation 1993) warned

As described in the section of social innovation, because

reasons, the organizations will be able to evolve their rec-recognition of problems evolves with thought of eligible

ognition. Based on this idea, the criteria were designed.

people and social circumstances, activities and organiza-

Also, they have to seek for the solution to the problems andtional operation method should be modified with theseestablish a feasible plan. These are the evaluation items forchanges. We determined “sustainable development” as an

the “method”.

evaluation viewpoint, in the sense that nonprofit organiza-

The “ability” required in problem solution is one with

tions always advanced and maintained stability at a certain

which the organizations find human resources including

level.

professional and technical people and financial resources,
and with which leaders make these resources function effi-

4.4. System and structure of evaluation criteria

ciently and utilize networks.

In this section, evaluation items based on basic condi― 51 ―Also, progress of activities and achievement process ofThe Nonprofit Review
Table 3 Structure of the evaluation criteria
Basic conditions
Criteria for
Excellent NPOs

Evaluation viewpoint(major themes)

Items for evaluation criteria

Evaluation criteria(33 criteria)

Self-assessment
items
105 items

CitizenshipParticipation andgrowthVolunteerDonation
Self-awareness

Four items
Four items
One itemSocial innovation

Problem solution

Recognition of problems
MethodAbility
Feedback
Advocacy
Independence

Three items
Three items
Three items
One item
One item
One item

Organization
stability

Sustainable
development

GovernanceDiversity and discipline of income
Cultivation of human resoucres

Five items
Five items
Two items

Source: Created by the author

purposes should be confirmed and evaluated. Also, “feed-

and functions as a check for transparency of the entire

back” of findings and lessons learned from evaluation shouldorganization. In addition, the nonprofit organization gains

be conducted for the next plans and activity methods. The

social credibility and discloses information to obtain a wide

activities to follow the PDCA cycle enable recognition of

support and participation from citizens.

problems, confirmation of the whole concept of purposes

As described earlier in “3. Current situation and problems

and plans and evolution thereof. Therefore, feedback wasof Japan’s NPO sector”, excessive reliance on a specificincluded in evaluation items.

financial resource causes damage to financial sustainability.

As described earlier, “advocacy” plays an important partConsequently, “diversity and discipline of income” waswhen the organizations inﬂuence a society. In solving theincluded in the evaluation items. Diversity of income meanssocial problems, the place of the nonprofit organization issecuring balanced and multiple resources of income. Dis-

important. As the inﬂuence of the nonprofit sector becomes

cipline means that fund-raising is conducted through fairlarger, the relationship with other sectors becomes deeper.

methods and that accounting is processed with rules.

Under these circumstances, nonprofit organizations should

Multiple conditions are required in order that organi-secure “independence” to tackle social problems volun-

zations are not content with a fixed position and maintaintarily. Therefore, “independence” is included in evaluation

the renovation. Here, this paper focuses on “cultivation of

items for “social innovation”.

human resources” which means cultivating staff members
inside the organization, with reference to the earlier(3) Evaluation items for organization stability

described results of the survey. Concretely, it is pointed that

Evaluation items in organization stability is “gover-staff members understand the mission and duty of theirnance”, “diversity and discipline of income” and “cultiva-organization, raise advice and guidance to find the problems

tion of human resources”.

and to produce an original idea.

Nonprofit organizations should streamline the conditions
as a responsible parent base and conduct activities. There-(4) Evaluation criteria structure

fore, “governance” was raised as one of the evaluation
items. On the assumption that the organization governs andTable 3 shows the structure of the evaluation criteria
structure of “Excellent NPO”.

conducts itself in the direction of its purpose, governance is

Each evaluation item defines preferable situations, based

the necessary element where the organization elaborates theon the evaluation viewpoint, which become the evaluation

system to observe such discipline and thereby becomes acriteria. “Citizenship”, which is a basic condition, has nine

responsible activity agent. Concretely, the mission andcriteria, “social innovation” twelve criteria, “organization

vision of the organization are shared among stakeholders.

stability” twelve criteria. There are 33 criteria in total (Refer

In other words, the decision-making process is transparent

to a list of criteria in Appendix).

― 52 ―

Excellent NPO Standards

We created self-assessment items for each item of criteria,“Visualization” means that NPOs show their approach toprepared such 105 items in total and facilitated the evalua-society, of making efforts to conduct excellent activities. Totion by score.

start with, the study group calls for NGOs who assess themselves through 16 criteria made from 28 items out of 33
criteria. The members of the research group built the organi-5. Conclusion: Evaluation and vision as quality
enhancement

zation “Citizen Advisory Board for Excellent NPO”. The“Board” published the booklet that explains how NPOs use

Finally, this paper explains the future expansion and16 criteria to evaluate themselves. It also started “Excellent
NPO Award” with the Mainichi Newspapers in 2012. The

evaluation as quality enhancement .

applicants are required to evaluate themselves with 16 cri(1) Expansion of “Excellent NPO”

teria of Excellent NPOs. The application form is designed

The evaluation criteria for “Excellent NPO” were estab-to fill out result of their self-evaluation. The members of thelished by practitioners of NPOs and NGOs and researchers

judging committee are required to judge those applicants

who sensed a crisis about the Japanese NPO sector’s cur-with the same 16 criteria. At the Excellent NPO Award cer-rent situation. We got back to the grass root and sought theemony, the judge process is clearly explained why thosedesirable image of a nonprofit organization.

applicant NPOs were nominated. Then, NPOs of both nom-

We were most concerned that NPOs were distancing

inated and not-nominated got together at the ceremony andthemselves from the citizens, hurting their credibility anddiscussed what they found through application process.

losing touch with a society, although they should originallyMore than 400 applications were sent until 2014. Thoughserve as a bearer of society to address social issues.

the dissemination and visualization has not reached the

The goal of the evaluation criteria for “Excellent NPO”
is to create a positive cycle between NPOs and citizens.

level that the “Board” expected, it will continue promoting
and monitoring these activities.

NPOs, whose activities are excellent call for support andparticipation from the citizens easily. With such support and(2) What is needed for evaluations as problem solution?

participation from citizens, NPOs become more competitive

Problems were extracted based on analysis of the current

to realize more excellent activities. While appropriate coop-

situation of NPOs and defined desirable NPOs to addresseration and friendly competition coexist, a positive cycle

the problems. The evaluation criteria for “Excellent NPO”

for seeking for more excellent quality of their activities iswere designed based on the definition. Therefore, the evalu-

generated among NPOs. Participation in such a positive

ation criteria mean a prescription for the NPO sector so thatcycle from many citizens enables reducing the distancethey find ways of enhancing their quality.
If that is the case, it is necessary to confirm how far

between NPOs and citizens again.
Creation of evaluation criteria for “Excellent NPO” is not

NPOs problems are solved to check the contribution of

the end. With the creation, NPOs are at the starting line at

the evaluation criteria to problem solution. Analyses are

last.
First of all, “dissemination” and “visualization” are indis-

conducted for “problems in organizational management”,“distance with citizens”, “problems of renovation”, andpensable. “Dissemination” means that NPOs not only convey“problems of structured NPOs: a declination toward the

how the evaluation criteria and self-assessment items are

public administration and market”, based on the financial

used but also raise questions to conduct discussions aboutdata and the survey. These data are applicable as baseline

whole concept of NPOs through 33 criteria.

data. Periodical confirmation of these data enables review

While NPOs have difficulties such as their managementof evaluation criteria based on analysis results.

stagnation, problems such as the subcontracting of theThrough the review process, it is important for stake-public administration and disproportionate reliance on profit-

holders and donors to share problem consciousness andmaking projects occur. In the absence of a management

convey it to even more citizens. In this context we inten-

model, these phenomena show the distress of managementtionally withdraw one criteria. That is performance ormembers of NPOs. Therefore, now is the time when NGOs

outcome criteria. People are interested in the results or per-get back to their grass roots and discuss the whole concept

formance of NPOs. However, “Citizen Advisory Board forof NGOs.

Excellent NPO” considered that it is too early to put per― 53 ―

The Nonprofit Review

formance criteria. However, the board carefully reviewed
the recent national international tendency of nonprofit evaluation and decided to develop new performance criteria. It
will be reﬂected “Excellent NPO Award” 2016.
In other words, the evaluation criteria for “Excellent
NPO” are required to become a gear of the positive cycle
between NPOs and citizens and review the effect. Also,
they are required to receive the users’ feedback, go throughmany revisions, and function effectively.
In general, evaluation is used to find out problems oforganizational management and project operation. However, it is possible to use it as prescription of problemsolving. Evaluation give NPOs an opportunity to consider away of improvement and quality enhancement, since it
gives NPOs awareness of their problems and provides somehints to solve those problems with the evaluation standards.
It is therefore more important to consider why the evaluation result is not satisfying rather than obtaining full marks.
NPO’s spontaneous actions for quality enhancement is prior
to the corrective actions by any other parties. Those actions
will contribute in preserving NPO’s social responsibility
and its autonomy as well.
To that end, it is necessary to examine the effect of theevaluation itself, build consensus among stakeholders, conduct continuous review and include the evaluation criteria
in the items of renovation.11
Final version accepted September 14, 2015

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This paper is written based on “Assessment system for excellent of
nonprofits: Assessment for problem solution” of Japanese Journal of
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― 54 ―

Excellent NPO Standards

Appendix
Reference material: 33 criteria for Excellent NPO
Basic conditions
Citizenship

Evaluation
viewpoint
Participation andgrowthEvaluation items

Evaluation criteria

Volunteer

Whether volunteer opportunity is open to public and contents of activities are easy to understand.
Whether an organizations explains mission, purpose and concept of activities.
Whether an organization sets up the discussion opportunity for volunteers and make feedback to their
proposals.
Whether an organization contrives ways to convey the appreciation to volunteers.

Donation

Whether an organization recognizes donors not only as suppliers of financial resources, as participants tothe organizations.
Whether donation opportunity is widely open to many people and the content of appeals for fund areunderstandably explained.
Whether an organization reports in order that donors build feeling of credibility.
Whether an organization contrives ways to convey the appreciation to donors.

Social innovation

Problem solution

Self-awareness

Whether an organizations has self-awareness of providing opportunity to participants, where participants
nurture their sense as a citizen and become a better citizen, furthermore they recognize social problems
and feel a sense of achievement and pleasure for solving problems.

Recognition ofproblems

Whether an organization understands the problems and themes it is addressing and clearly recognize
them as their own problems.
Whether an organization addresses the problems and has the attitude and viewpoint to find out thebackground causes and reasons.
Whether an organization eyes not only problems they address but also problems for the social structuresuch as system and tradition.

MethodWhether an organization aims at outcome level achievements.
With the progress of recognition of problems, whether an organization carries forward and evolves themethod of problem solution (including methods of purposes, plans and activities).
Whether an organization has the perspectives for problem solution from medium to long-term viewpoint.

Ability

Expertise. Whether an organization has the ability to determine what are the necessary technologies andknowledge for problem solution.
Leadership. Whether the leader of an organization serves as a bearer for problem solution and fits
resources such as experts inside and outside of the organization and funds and has the coordination
ability to make them function.
Network. Whether an organization builds up relationship with other organizations and people outside of
their own organizations to cooperate with them, sometimes competes friendly with them and improves
each other.

Organization
stability

Sustainable
development

Feedback

Whether an organization has the system to evaluate the approach and whole concept of the achievement
and conducts the feedback of the result.

Advocacy

Explanation to and understanding from a society. Whether an organizations tries to make a society
understand problems, missions and activity purposes the organization is addressing.

Independence

Whether independence and neutrality of an organization are maintained. (It is important for theorganization to cooperate and collaborate with various types of stakeholders on the premise that theindependence is secured.)

Governance

Whether the mission of an organization is clearly presented.
Whether the mission is shared by the stakeholders of an organization.
Whether the decision-making section, the operational section and the checking section are clearly
defined and their choosing methods and processes are transparent.
Whether the check mechanism functions including the policy of the entire organization, checks for thefunction of discipline and transparency.
Whether the entire picture of an organization is explained.

Diversity anddiscipline ofincomeComposition of income. Whether an organization maintains the income diversity to evade the risk byfund-raising from various agents.
Discipline for fund-raising. Whether an organization conducts fund-raising by considering the independence of the organization.
Whether the fund-raising process is transparent and the organization does not receive the fund raised by
the conduct offensive to public order and moral.
Accounting system. Whether organizational accounting is properly processed based on transparent andexplicable accounting system.
Whether the check for accounting operation functions.

Cultivation ofhuman resources

Treatment for staff members. Whether an organization provides staff members with treatment andworking environments in accordance with standards such as laws.
Cultivation of staff members. Whether an organization contrives ways to make staff members
understand their duties based on the organization’s mission.

Source: Citizen Advisory Board in Pursuit of “Excellent NPO” (2010), created by the author― 55 ―