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No. 9 June 2004

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•Tsunami Response Showcases NGO Progress and Challenges

•Japanese International Development NGOs Reach Critical Stage

•American Investment Firm Launches Innovative Funding Scheme

•New Organization Fights AIDS and Other Communicable Diseases

•Reconciliation and Civil Society: Lessons from History

•Nonprofit Sector Reform—A Step Forward?

New Organization Fights AIDS and Other Communicable Diseases

With public health experts increasingly pointing to the spread of AIDS as the gravest threat facing Asia, a new organization has been launched as a private support group for the Global Fund to Fight AIDS, Tuberculosis and Malaria. The Friends of the Global Fund, Japan (FGFJ), which is chaired by former Prime Minister Yoshiro Mori and operates with JCIE as its secretariat, is working to encourage greater Japanese participation in the fight against communicable diseases. Since the spring of 2004, it has sought to heighten public understanding in Japan of the threats posed by these diseases, mobilize all sectors of society to participate in joint responses, and build cooperation between Japan and other countries in the regional and global struggle against these diseases.

UNAIDS is warning that Asia may soon surpass Africa as the region with the most HIV infections, and some analysts are projecting that the number of HIV cases in China alone is likely to reach the 10 million mark by 2010. However, in Japan, prevalence remains relatively low. An estimated 20,000 people have contracted the disease in Japan, and thus it comes as little surprise that societal awareness and media coverage are generally muted.

Still, the growing interconnectedness that is fueling the spread of HIV/AIDS in the region means that even countries with comparatively low prevalence rates are likely to face serious fallout from the epidemic. Regional security, social stability, and economic growth can all be affected as populations become debilitated, and experts insist that no country in the region can consider itself immune to the disease's impact. For instance, economic integration between China and Japan has been growing rapidly, allowing China to overtake the United States as Japan's largest trading partner in 2004. With all of the investment and trade linkages this entails, a widespread outbreak in China is bound to take a toll on the Japanese economy even if the infection rate in Japan remains low.

The Geneva-based Global Fund was founded in January 2002 at the urging of the United Nations, and it operates as a private foundation that mobilizes and then allocates governmental and nongovernmental contributions to fight AIDS, tuberculosis, and malaria around the world. The Global Fund has been encouraging the establishment of private-sector support groups to help raise understanding of its activities in major donor countries, thereby promoting widespread involvement in the fight against communicable diseases. In addition to the FGFJ, a U.S. nonprofit organization called the Friends of the Global Fight was founded in 2004 in Washington, DC, with Jack Valenti as its president, and similar groups are being established in France and elsewhere.

The launch of the FGFJ was announced by former Prime Minister Mori at a March 2004 conference in Tokyo, and its advisory board—consisting of a diverse set of leading figures from business, government, labor, medicine, and the nonprofit sector—met for the first time in June. With initial financial backing from the Open Society Institute, the United Nations Foundation, and the Vodafone Group Foundation, the FGFJ promotes understanding of the Global Fund in Japan by disseminating information on the fund's activities. This entails such activities as translating resource materials and, on occasion, it involves bringing Global Fund representatives and other experts together with leaders from various sectors of Japanese society for briefings and discussions.

In particular, the organization aims to raise awareness within Japan about the human security threat posed by communicable diseases and Japan's international role in the response. It has begun outreach efforts to business, labor, and nonprofit leaders, and it has also been encouraging media coverage of HIV/AIDS. These efforts have included the formation of a multiparty task force of nearly 30 Diet members that meets regularly for briefings and discussions on issues related to the spread of AIDS and other communicable diseases. The FGFJ plans to lead a fact-finding delegation of task force members to severely affected countries in the region to explore how Japan can more effectively contribute to prevention, care, and treatment efforts overseas.

Another central goal of the FGFJ is to encourage cooperation between Japan and other East Asian countries in the regional and global fight against communicable diseases. It has launched a survey to assess business, civil society, and governmental responses to the spread of HIV/AIDS in countries around the region. Practitioners and scholars from 12 countries in the region are preparing studies on national-level policies to combat the epidemic. They will meet in Tokyo at a June conference to discuss their work, which will be compiled in a resource volume. Organizers hope that this study will lay the groundwork for a better-coordinated regional approach to the disease and contribute to the development of a network of regional leaders working to advance cooperative solutions.


More information about the Friends of the Global Fund, Japan, is available at http://www.jcie.or.jp/fgfj.

Reconciliation and Civil Society: Lessons from History

One of the most dramatic and least understood aspects of the post-World War II transition in the U.S.-Japan relationship was the process by which such bitter enemies became the closest of allies in a short period of time. While there have been many studies on the role of both countries' governments in rebuilding the relationship, the important impact of nonstate actors—private philanthropy, academics, nongovernmental organizations, and other civil society actors—has been largely overlooked. In an attempt to develop a more complete picture of postwar U.S.-Japan relations, JCIE undertook a three-year research project on the "Role of Philanthropy in Postwar U.S.-Japan Relations, 1945-1975." The findings of the study—which involved extensive archival research, in-depth interviews with some of the key philanthropic players in the postwar period, and a series of workshops in the United States and Japan—will be published in mid-2005.

While this project adds another important dimension to the study of U.S.-Japan relations by highlighting and analyzing the key role of philanthropy and civil society in the postwar period, it also offers some broader insight into strategies for reconciliation in post-violent conflict situations. In the case of postwar Japan, a small number of U.S. foundations encouraged reconciliation by building up the underpinnings of the relationship over the first three decades following the war. This study revealed that a core group of funders—the Asia Foundation, the Carnegie Corporation, the Ford Foundation, the Rockefeller Foundation, and John D. Rockefeller 3rd (JDR 3rd) and his various philanthropies—spent between $55 and $60 million on more than 4,000 grants related to Japan in the fields of international exchange, education, intellectual exchange, and civil society development. According to the study, private U.S. foundation objectives in Japan during the three decades following the end of the war reflected the contemporary intellectual trends of internationalism, New Deal progressivism, and Cold War liberalism. The individuals who led Japan-related funding were idealists with strong beliefs in the creation and sharing of knowledge, and they emphasized the development of intellectual networks and exchange.

Foundation objectives often coincided with—but were not driven by—U.S. government agendas of the time. Broadly speaking, they were committed to preventing a recurrence of war, encouraging democratization, stemming the spread of communism, and bringing Japan into the regional and international community. In order to satisfy those objectives, U.S. foundations sought to create programs for mutual understanding, develop the human resources vital to a strong relationship, establish an intellectual dialogue between the two countries, and build lasting institutions for exchange.

With objectives similar to those of the government, one may question the importance of private philanthropic initiatives to the bilateral relationship and to reconciliation efforts more broadly. Many of the foundation staff who were funding projects related to Japan have argued that they often found nongovernmental organizations better placed and better able than the government to support reconciliation. As one Ford Foundation official stated in a 1962 memo, "a foundation can contribute in some areas even more effectively than the government to the restoration of what Ambassador Reischauer has called the 'broken dialogue.'"

Private foundations were able to operate from a long-term perspective and take more risks—within limits—on new institutions and controversial ideas. They deliberately reached out to Left-leaning scholars and other leaders in Japan, with the hope that they could engage them in a broader dialogue.

The lessons from this study highlight the need to focus on nongovernmental as well as governmental contributions in reconciliation processes following violent conflicts today. Governmental contributions after violent conflict often focus more on reconstruction of physical infrastructure than on the underpinnings of reconciliation. Private foundations and other nongovernmental organizations are more likely to be recognized as genuinely promoting reconciliation rather than promoting a particular government agenda. In addition, the underpinnings of reconciliation require broad participation throughout both societies that are rebuilding a relationship, and this cannot be done without support for grassroots and intellectual exchange. Private support, unencumbered by perceptions of governmental control and aimed at building mutual understanding and partnership at all levels, is critical to the reconciliation process.

Most of the key foundations active in U.S.-Japan relations provided support for area studies programs—American studies in Japan and Japanese studies in the United States—in an attempt to create a cadre of scholars in both countries who understood the complex cultural, political, and social context of their former enemies. The foundations also sought to develop mutual understanding using vehicles outside of the universities, by creating and solidifying institutions for exchange among a broader range of actors. The Japan Society in New York and the International House of Japan are two examples of organizations that owe their existence to private support from sources in both countries.

In addition to this emphasis on building and strengthening academic and intellectual exchange institutions, most of the foundations providing Japan-related funding in the postwar period focused much of their support on individuals throughout Japanese society. The Asia Foundation in particular provided a large number of small grants to individuals for travel and study abroad, with the explicit belief that allowing people to experience Western lifestyles and culture firsthand was the most effective way to convince them of the value of Western ideology. There was an attempt to engage current and future elites as well as individuals working at the grassroots level in order to embed understanding of and engagement with the West at all levels. Again, it was the Asia Foundation that focused most on the grassroots level, partially reflecting its organizational character and partially reflecting the fact that it had a representative on the ground in Japan and was therefore better connected among grassroots leaders than were its colleagues in other foundations who depended on their contacts with more elite actors.

It is important to note that the major foundations involved in postwar reconciliation insisted on forming equal partnerships with organizations and individuals in Japan. They were determined to encourage local leadership and a sense of ownership of the programs they funded within Japan. The idea was that Japanese citizens were best qualified to decide what Japan needed. This idea remains crucial to post-violent conflict reconciliation, which is something that can only emerge from interaction among equals.

One prominent example of local leadership over philanthropic initiatives was support for International House, to which the Rockefeller Foundation provided funding—at the urging of JDR 3rd—with the condition that matching funds of ¥100 million be raised within Japan. While this was a formidable amount of money at the time, a core group of Japanese businessmen and political leaders took on the task and raised the full amount, gaining the cooperation of more than 3,000 individuals and 5,000 corporations in their effort.

This example also highlights the importance of relying on existing networks and engaging influential actors with relevant knowledge and expertise. Japanese citizens were not able to travel to the United States during or immediately after the war, but a number of key individuals had experience living, working, or studying there prior to the war. Their keen understanding of the United States enabled them to work closely and productively with American foundations.

Many of the American foundation officials who were active in Japan-related funding after the war also had close ties to Japan, some through foundation-funded study before the war and others through military and government experience during the war and the Occupation. They recommended policies on Japan that at times seemed counterintuitive to their colleagues with little or no Japan-related experience. These individuals were able to draw heavily on their own networks to determine needs, strategically identify grantees, and encourage broader participation in projects and programs funded by the American foundations.

The world today is very different from what it was in 1945. Advances in international travel and information technology have opened up opportunities for communication among people and education on societies around the world. Still, we are faced with many of the same challenges to truly understanding other cultures and rebuilding relationships after periods of violent conflict. As we search for mechanisms for building strong, lasting relationships around the world today, there is much to be learned from the postwar successes of philanthropic initiatives to strengthen the U.S.-Japan relationship.

JCIE's study of the role of philanthropy in rebuilding postwar U.S.-Japan relations will culminate in mid-2005 with the publication of an edited volume. It will include chapters on the following topics:

The Role of Philanthropy in Rebuilding Postwar U.S.-Japan Relations, Tadashi Yamamoto
Nonstate Actors in Postwar U.S.-Japan Relations
The Role of Philanthropy and Civil Society in U.S. Foreign Relations, Akira Iriye
Japan-U.S. Intellectual Exchange, Makoto Iokibe
The Evolution of U.S. Foundation Involvement in Japan
The Evolving Role of American Foundations in Japan, Kim Gould Ashizawa
An Analysis of Grants to Japanese Institutions and Individuals, Jun Wada
Case Studies of Philanthropic Support in Pivotal Fields
Promoting the Study of the United States in Japan, James Gannon
Foundation Support for Japanese Studies in the United States, Kim Gould Ashizawa
Grassroots-Level International Exchange in Japan and the Impact of U.S. Philanthropy, Toshihiro Menju
The Role of Japanese Philanthropy
U.S.-Japan Business Networks and Prewar Philanthropy in Japan, Masato Kimura
Japanese Philanthropy: Origins and Impact on U.S.-Japan Relations, Hideko Katsumata

Nonprofit Sector Reform—A Step Forward?

On December 24, 2004, the Koizumi cabinet announced plans for its administrative reform program, which included official guidelines for reform of the public interest corporation system, an important component of Japan's nonprofit sector. The ongoing reform process, which the past two issues of the Civil Society Monitor have followed, has disappointed many civil society experts, who are deeply concerned that the proposed reforms may actually be a setback for the sector.

Japanese nonprofit organizations fall into a number of categories, the two most prominent of which are "public interest corporations" (koeki hojin) and "NPOs" ("specified nonprofit corporations" or NPO hojin). Approximately 26,000 organizations are classified as public interest corporations, including most of the larger, more established nonprofit organizations and private foundations, a sizeable minority of which are loosely affiliated with a government agency. Once they complete a lengthy and onerous authorization process to become incorporated under the provisions of the 1898 Civil Code, they are automatically awarded tax exemption on not-for-profit income. NPOs, meanwhile, can be incorporated relatively easily in accordance with the 1998 NPO Law, which also allows them tax exemption. They tend to be smaller than public interest corporations, and more than 20,000 of them have been established in the past six years.

The government's reform initiative was launched in mid-2002, and a private sector advisory council on public interest corporations was convened in two phases by the Minister of Administrative Reform. In November 2004, the advisory council issued its final report, which included a series of proposals to be incorporated into the cabinet decision. However, except for replacing an authorization system with a registration system, the advisory council report and the subsequent cabinet guidelines offer little in the way of concrete measures to promote nonprofit activities.

The one major reform proposed in the government plan eliminates the need for organizations to solicit permission for their establishment from "competent authorities." Currently, authorization for incorporation is awarded solely at the discretion of the government agency with jurisdiction over the applicant's field of activities. For example, the Ministry of Foreign Affairs is responsible for organizations focusing on international affairs. The proposed new system will, instead, simply award incorporated status to any nonprofit organization that registers and then complies with general rules.

The fact that public interest corporations will no longer need authorization for incorporation may seem like a step forward. But under the proposed plan, once they register, they then will have to seek additional authorization to confirm that they serve the public interest and should thus be accorded preferential treatment in terms of taxation and other issues. A new council will be established to make these judgments, but the lack of clarity as to its composition and autonomy is raising considerable concern. The final advisory council report recommended the creation of a new, independent entity, but the government changed this to a council under the jurisdiction of a state minister in the prime minister's office that would include private sector experts. This indicates that the bureaucracy would likely extend considerable influence over the council and its decision-making processes.

Another major complaint about this reform involves its failure to set out concrete guidelines for judging whether organizations serve the public interest. The question of who decides and on what basis still remains to be resolved. Also, there are serious questions about what will be done with government incentives for nonprofit activity, most notably, the taxation system. Important issues, including the taxation of income, have been left undecided.

The cabinet secretariat for administrative reform is drafting bills based on these proposals for submission to the Diet in 2006. Meanwhile, the Tax Commission, which advises the prime minister on tax policy, will begin debating the taxation of nonprofit organizations in April 2005 and is likely to propose new legislation in January 2006. The lack of clarity about the concrete measures that will be included in the proposed legislation has fed apprehension in the nonprofit sector and is certain to stir further outcry once the measures are made public. In the meantime, the nonprofit sector will be closely watching the evolution of these bills and will continue to search for ways to make the legal framework more hospitable.