Historical financial accounting, which aims to calculate income and expenditures, is able to provide accountability to fund sponsors, but has limitations in reporting the achievement of a nonprofit organization (NPO)’s social missions. Thus, an NPO should consider their social accountability toward their wide-ranging stakeholders. However, it is difficult for NPOs, which provide free or low-charge services with numerous volunteers, to accurately estimate inputs and outputs for social values which are not included on income statements. Therefore, we focus on the social accounting method to calculate an NPO’s invisible social costs and benefits by using the concept of market values and replacement costs. Additionally, we tried, as a case study, to prepare the social value statement of a nonprofit bank, Community Youth Bank Momo, which collects funds from a wide range of citizens and uses them to provide loans for community-based activities. As a result, it was found that total inputs including volunteer activities and out-of-pocket expenses reached to five-times the actual expenditures paid. However, issues still remain with the application of social accounting to various NPO activities and the calculation of rational market values.

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This study reveals the process by which local government officials come to understand nonprofit organizations (NPO) through Government-Nonprofit Partnerships. In order to do an inductive analysis of data based on semi-structured interviews with nine officials who experienced partnership programs with NPOs, the modified grounded theory approach was used. After categories were created from the data in analytical stages from labeling concepts to selecting final categories, eight categories were extracted and then consolidated into three category groups: “Interpretation of partnership concepts,” “Implementing partnerships” and “Evaluation of partnerships.” Before having experienced collaborating, the officials had vague and ambiguous interpretations of partnerships with NPOs. While collaborating, officials became aware of the NPO characteristic which is referred to as “voluntary failure,” and this created confusion. However, they gradually came to accept this fact and transformed their understanding of themselves. When the partnership programs were completed, officials became aware of the importance of experiencing partnerships with NPOs and indicated an understanding of NPOs. This altered awareness of officials is brought about by numerous pieces of knowledge created and utilized during partnerships. Partnerships between local governments and NPOs function as an opportunity for creating knowledge enabling the two to understand each other.

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In view of recent environmental issues such as climate change which have become increasingly complicated in terms of time and space, the conventional policy formation and implementation processes promoted by the bureaucracy have shown serious limitations. Therefore, it is hoped that NPOs, with their specialized capabilities and flexible approaches to issues, can effectively participate in the formation and implementation of laws. This article defines the “enactment of a law by citizens” as a process in which NPOs identify an issue, propose a legal framework for a solution, and monitor the implementation of the law, based on the case study of two laws which were proposed and promoted by an NPO. The article makes clear that, at the present stage, NPO participation in the enactment process is far from satisfactory and its influence is quite limited. However, in other countries NPO participation in the policy formation process is regarded as essential and is being institutionalized. In Japan, the widening recognition of the effectiveness of NPO participation may lead to the enhancement of the policy formation and implementation processes and to the empowerment of NPOs as well.

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