Significance of "NPOs" in the market: Suggestions by Japanese NPOs toward sustainable society

Sachiko Nakagawa

EMES Conferences Selected Papers Series, ECSP-B08-10
Thematic line: Management and governance of the Third Sector: Theoretical and applied approaches

In Japan, recently, a “market” where NPOs (non-profit organizations) compete with FPOs (for-profit organizations) is emerging in a certain few service areas. Why do NPOs take the non-profit form in the market? Prior researches suggest that NPOs have advantages over FPOs because of tax deductible status, donations and getting easily trust from consumers due to the “non-distribution constraint.”

In this paper, I focus on Japanese NPOs daring choice of the non-profit form in the market in spite of no tax benefits, and make a comparison between NPOs and FPOs in terms of what they think and how they behave in the market. Among others, I found that significance of taking the non-profit form is practicing policy not for precedence to economy, and that leads to sustainable NPOs which can compete with FPOs in the market.

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