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Transcript of 1 Making Nonprofit Satellite Account: Japanese Experience Naoto Yamauchi, Osaka University October...
1
Making Nonprofit Satellite Account:Japanese Experience
Naoto Yamauchi, Osaka University
October 11, 2006Working Party on National Accounts, OECD
2
What is Nonprofit Satellite Account ?
A satellite account of nonprofit institutions is a comprehensive statistical system to describe activities of the nonprofit sector, in consistent with 1993 SNA.
It has been proposed by the UN Statistics Division in collaboration with Johns Hopkins CNP team.
3
UN Handbook
For inplementation, Handbook on Non-profit Institutions in the System of National Accounts was released in 2003.
It is a manual of estimation procedures, and contains definition, classification, key variables and tables, data collection strategy etc.
4
Why Nonprofit Satellite Account ?
Civil society, nonprofit and nongovernmental sector: an emerging force worldwide
Increased policy interest But, insufficient statistical information Need comprehensive and detailed statistical
system, preferably consistent with SNA
5
JHCNP and Satellite Account
Johns Hopkins Comparative Nonprofit Sector Project (JHCNP) is a unique private initiative, and has produced statistics on nonprofit sector for well over 30 countries including Japan since 1990s.
At the new phase of the project, they call on national statistical offices to prepare a “satellite account” on the nonprofit sector and philanthropy as part of their regular economic data gathering and reporting.
6
Towards More Comprehensive Picture Nonprofit satellite account will pull together a
much more comprehensive and reliable picture of the nonprofit sector than has ever been available by estimating scale and structure of the sector.
As part of this process, statistical agencies are also called on to estimate the scale and value of the volunteer effort these organizations mobilize and to include this in estimates of economic activity (from JHCNP website).
7
Countries involved To date, following 26 countries have committe
d to implement Nonprofit Satellite Account. Argentina, Australia, Belgium, Brazil, Canada,
Camaroon, the Czech Republic, France, Ghana, India, Israel, Italy, Japan, Kenya, Kyrgyzstan, Korea, Mali, Morocco, New Zealand, Peru, Philippines, Slovakia, South Africa, Uganda, the United States, and Zimbabwe
8
Japanese Experience
Activities of nonprofit sector and roles of civil society have received increased attention by policy makers and researchers since mid 1990s.
Local governments (many suffered from serious financial problem) have tried to contract out various activities to local nonprofits.
9
Important Events for Nonprofits 1995: Disaster relief & urban reconstruction in
wake of Kobe Earthquake 1998: Implementation of the Law to Promote
Specified Nonprofit Activities (“NPO Law”) 2000: Nursing Care Insurance System begins 2001: Tax-deductible donations for selected
public benefit nonprofit corporations begins 2003: Implementation of amended NPO Law 2006: Enactment of the New Public Benefit
Corporations Act
10
Increasing Number of Nonprofit Corporations
1,1762,470
3,703
5,328 5,3064,800
3,475
1,9803,156
5,626
9,329
14,657
19,963
24,763
28,238
1,1760
5000
10000
15000
20000
25000
30000
1999 2000 2001 2002 2003 2004 2005 2006
Annual # of accreditations Cumulative # of accreditations
Source: Cabinet Office Website(Data as of August 31, 2006)
11
Research team for Japan
Economic and Social Research Institute (ESRI) of the Cabinet Office officially committed to implement nonprofit satellite account project.
They started two year (2005-2006) project, by contracting out to private research institute.
Research team of 7 economists and practitioners has been set up.
12
Working Definition in the Handbook
NPI must fulfill the following; Organizations Not-for-profit and non-profit distributing Institutionally separate from government Self-governing Non-compulsory membership
13
Treatment of NPIs in the 93SNA source:JHCNP
Non-financialcorporations
sector
Financialcorporations
sector
Generalgovernment
sector
Householdssector
NPISHsector
(S.11) (S.12) (S.13) (S.14) (S.15)
Corporation C1 C2
Governmentunits
G
Households H
Non-profitinstitutions
N1 N2 N3 N4 N5
Sectors of the SystemType ofinstitutionalunit
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Institutional Units Cross-Classified in 93SNA source: JHCNP
Non-financialcorporations
sector
Financialcorporations
sector
Generalgovernment
sector
Householdsector
NPISHsector
Corporation
Non-financialcorporations and
quasi-corporations
Financialcorporations and
quasi-corporations
Governmentunits
Governmentunits and socialsecurity funds
Households Households
NPIsNon-financialmarket NPIs
Financial marketNPIs
Nonmarket NPIscontrolled and
financed mainlyby government
Nonmarket NPIsserving
households
SectorType of
InstitutionalUnit
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ICNPO:International Classification of Nonprofit Organizations 1. Culture & Recreation 2. Education & Research3. Health 4. Social Services 5. Environment6. Development & Housing7.Law, advocacy and politics8. Philanthropic intermediaries and voluntarism
promotion9. International 10. Religion 11. Business and professional associations, unions12 Not elsewhere classified
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Relation between ICNPO and Primary Statistics
Survey on PrivateNonprofit Orgs
Basic Survey on CivicOrgs
Today’s Private SchoolFinances
Survey on MedicalEconomics
1) Culture/Recreation X X
2) Education/Research X X X
3) Health Care X X X
4) Social Services X X
5) Environment X
6) Development/Housing X
7) Law, Advocacy, Politics X
8) Philanthropic Intermediary, Voluntarism Promotion
X X
9) International X
10) Religion X
11) Business & Professional Associations, Labor Unions
X
12) Other X
17
Three Versions of Accounts Suggested in
the Handbook
1993 SNA basis SNA + non-market output of market NPIs SNA + non-market output of market NPIs
+ value of volunteer labor
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Non-market output of market NPIs
Non-market output of market NPIs (eg. free phone consultation by private hospitals) is not counted under 1993 SNA, but should be counted under nonprofit satellite account.
Because such non-market output, often supported by charitable giving, is important part of NPIs, although that may not show up in sales revenue.
19
Relationship between NPI and Market/ Non-Market Output
Market Output Non-Market Output
Market NPI X X
Non-Market NPI X
20
Institutional Sectors and Market, Non-Market Categorization of Japanese NPIs
NPI Institutional Sector Market vs. Non-Market
Medical Corporations Non-Financial Institutions
Market
Producers of Nonprofit Services Serving Households
NPISH Non-Market
Producers of Nonprofit Services Serving Businesses
Non-Financial Institutions, Financial Institutions
Non-Market
Incorporated Nonprofits Households, NPISH Non-Market
Unincorporated Voluntary Associations
Households, NPISH Non-Market
21
Valuing Volunteer Labor
Because volunteer labor is so important for nonprofits, imputed value of volunteering is counted under nonprofit satellite account.
Volunteer time is valued based on the replacement cost (not opportunity cost) method, using average wage of welfare and social service field.
22
Scale and Structure of Japan’s NPIs
The scale of Japan’s NPI in 2003
inc. non-market output of market NPIs Output: 36.3 trillion yen Employee compensation: 19.1 trillion yen Gross value added: 20.8 trillion yen
compared to NPISH: 9.8 trillion yen
23
1) Expenditure
16,83022,300
27,82935,052
18,87017,555
13,695
15,344
363
237557611
0
10,000
20,000
30,000
40,000
50,000
60,000
1990 1995 2000 2003
BillionYen
Property Income Payments
Contributions, Subsidies, Othertransfers (payments)Operating Expenses
Expenditure & Revenue Structure of NPI
24
2) Revenue
13,69118,451
22,23227,447
24,053
24,82422,161
26,835
678
1,754 632
2,578
0
10,000
20,000
30,000
40,000
50,000
60,000
1990 1995 2000 2003
BillionYen
from property income
from contributions, subsidies,donationsfrom sale of services
25
2,092 2,644 3,797 3,903
4,245
6,043
8,558
11,119
3,407
4,292
5,071
5,669
0
0
0
35
0
116
0
0
0
5,000
10,000
15,000
20,000
25,000
1990 1995 2000 2003
BillionYen
UnincorporatedNonprofit Orgs.
Specified nonprofitcorp.
Survey on PrivateNonprofit Orgs.
Medical Corp.
School Corp.
Gross Value Added by Type of Organization
26
Gross Value Added by Field of Activity
2,100 2,657 3,817 3,935
4,2876,103
8,62611,257
1,555
2,010
3,099
3,580751
688
829
602
719
694
868
740
601
502
512
458
0
5,000
10,000
15,000
20,000
25,000
1990 1995 2000 2003
Billion Yen
Other11:Professional orgs., Trade Unions10:Religion4:Social services3:Health care2:Education and research
27
NPIs including Imputed Value of Volunteering 2003 in billion yen
NPI of SNA standard,NPI including nonmarket output ofmarket NPIs
Value ofvolunteering
NPI includingvolunteering
Total 20,842 1,808 22,650(1)Culture and recreation 72 212 284(2)Education and research 3,935 334 4,269(3)Health 11,257 94 11,351(4)Social services 3,580 479 4,059(5)Environment 52 213 265(6)Development and housing 11 254 265
(7)Law, advocacy and politics
2 114 116
(8)Philanthropic intermediaries and voluntarism promotion
40 - 40
(9)International 4 0 4(10)Religion 751 107 858
(11)Business and professional associations, unions
719 - 719
(12)Not elsewhere classified 420 - 420
28
Growth of NPIs overtime
In Japan growth rate of value added of NPIs has been much higher than GDP, since 1990s including the period so called “lost decade.”
As a result, relative size of gross value added produced by NPIs to GDP has increased from 2.2% in 1990 to 4.2% in 2003.
29
5.90 6.07 6.15
2.2
2.6
3.4
4.2
-1
0
1
2
3
4
5
6
7
1990 1990-1995 1995-2000 2000-2003
Ann
ual g
row
th r
ate
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
ratio
of
NP
I to
GD
P
NPI growth rate
GDP growth rate
ratio of NPI to GDP
Growth rate of NPI &GDP
30
Issues for discussion (1) Unit of estimation is ambiguous Establishment vs. institution vs. activity ‘Non-profit-distribution’ can be applied to
institution, although the Handbook suggests establishment as unit of estimation
Valuing volunteering is inconsistent While unpaid volunteers are valued, paid
volunteers (paid but much lower than the market rates, common in Japan) are not be valued.
31
Issues for discussion (2)
Definition of NPIs is still amboguous
Eg. Are national universities NPIs due to incorporation or general government ?
ICNPO: demerit of hybrid system
Eg. Should NPI for international healthcare classified as international or healthcare?
32
In Conclusion
Nonprofit satellite account (NSA) provides very useful information on the nonprofit sector
It would be useful to produce NSA regularly (eg. every 5 years)
More countries are welcome to NSA implementation. The more countries involved, the richer the international comparative statistics.