Evaluation of the Financial Autonomy of Third-sector Organizations in Japan

The advance of liberalist reforms in public-private relationships has greatly expanded the role of third-sector organizations as representatives of the public. Although literature on third-sector organizations has grown substantially, the issue of how the strengthening of such relationships affects third-sector organizations' autonomy has not been fully explored. This paper assesses third-sector organizations' autonomy, particularly their financial autonomy. The Herfindahl-Hirschman Index is used to measure the diversity of revenue sources and applies it to a national sample of third-sector organizations. Furthermore, factors impacting the diversity of revenue sources are demonstrated. The results find that financially large organizations have a greater dependence on single revenue sources. Moreover, they suggest that third-sector organizations in general are becoming more dependent on single revenue sources. Designing systems that will enable third-sector organizations to preserve their autonomy should be made a priority.