### 1. Organization

The board members of social welfare foundations must consist of no less than six directors and no less than two auditors. The directors must include persons with knowledge and experience in social welfare services or involved in local welfare and the heads of the facilities managed by the foundation.

In addition, selecting officials of relevant administrative agencies or persons who cannot actually participate in the operation of the foundation is considered inappropriate. Selection of specially-related persons, such as relatives, etc., is also restricted.

A council must be established for each foundation except for those exclusively engaged in the following services.

[1] Social welfare services of prefectures or municipalities that implement measures for persons requiring welfare services

[2] Services of managing day-care centers (including attached regional centers for childcare support and temporary childcare (temporary day-care) services)

[3] Services of long-term care insurance

### 2. Assets

Property such as land and buildings, which are needed in the provision of the social welfare services, should be allocated as basic property.

No less than 1/12 (no less than 2/12 is desirable for foundations partly engaged in services related to the Long-Term Care Insurance Act, etc.) of annual operating expenses shall be allocated as operating assets in the form of cash or deposits, etc.

### 3. Services

Social welfare foundations can engage in public benefit services and profit-making services in addition to the social welfare services listed on the previous page.

Public benefit services denote services intended to benefit the public but which do not fall into the category of being social welfare services (services with no relation to social welfare do not get approved). More concretely, in-home long-term care support services and the services of managing health care facilities for the elderly or charged homes for the aged, etc. are included as being public benefit services.

Profit-making services refer to services whose profit is appropriated to run social welfare services or public benefit services implemented by the foundation, and can include the management of leasing buildings, parking lots, and running stores, etc. utilizing property owned by the foundation.

Both public benefit services and profit-making services must be subordinate businesses to the main business of social welfare services. In addition, the assets to be used in those purposes should be managed separately from basic and operating assets.

### 4. Disclosure

All the foundations must prepare statements on their operation, a general inventory, balance sheet, and revenue and expense statement by May every year and then submit a report on the current status of the social welfare foundation, including the abovementioned statements, to the competent agencies by the end of June.

The foundation must retain these documents and auditors' opinions at its office and have them available for public inspection, except with due reason.

Actively use of external audits made by certified public accountants and licensed tax accountants is considered appropriate.

### 5. Counseling on establishment

In the course of establishing social welfare foundations the departments and bureaus of prefectures, designated cities, and core cities in charge of the pertinent social welfare foundation should be consulted.

### 6. Other

## Qualification as head of a facility

The head of a social welfare facility must meet the qualifications provided for in the ordinances of the Ministry of Health, Labour and Welfare and of the former Ministry of Health and Welfare and the “Head of Social Welfare Facilities Managed by Social Welfare Foundation (Director-General Notification)” in 1972.

Changes in Number of Social Welfare Foundations

(As of March 31 of each year)

Year	1980	1985	1990	1995	2000	2001	2002	2003
Under the jurisdiction of the Minister of Health, Labour and Welfare	9,471	11,672	118	127	138	144	146	151
Under the jurisdiction of prefectural governor, etc.	-	-	13,305	14,705	16,553	16,959	17,559	18,162
Year	2004	2005	2006	2007	2008	2009	2010	2011
Under the jurisdiction of the Minister of Health, Labour and Welfare	164	181	195	222	242	285	308	330
Under the jurisdiction of prefectural governor, etc.	18,636	18,642	18,258	18,412	18,448	18,625	18,674	19,206

Source: Social Welfare and War Victims' Relief Bureau, MHLW

(Note) All socail welfare foundations were under the jurisdiction of the Minister of health, Labour and Welfare until April 1987.