Japan: The "Legacy Debt" Crisis
In Japan, the inequality is rooted in what we might call "Legacy Debt." As the government has long anticipated the onset of a "2025 Digital Cliff," a structural risk identified by Japan's Ministry of Economy, Trade and Industry (METI) where aging IT systems could lead to economic losses of up to 12 trillion yen annually (approximately 2% of GDP), many small nonprofits are finding their manual workflows fundamentally incompatible with the new digital economy.
According to the Doing Good Index 2024, which surveyed over 2,100 social delivery organizations across Asia, Japanese nonprofits face some of the most severe capacity-building gaps in the region. A striking 66% of Japanese organizations never receive donor support for capacity building, among the highest rates in Asia. Even more concerning, only 4% receive consistent support, compared to the Asian average of 15%.
While funding might be a root cause, the immediate problem is felt as a lack of qualified staff, a pattern that is getting worse, not better, over time. The 2025 Japan NPO Center survey on IT utilization found that while IT has become indispensable for nonprofit operations, approximately 90% of organizations reported significant shortages in both the number of IT personnel and their skill levels. This suggests a persistent gap between the digital demands placed on organizations and their capacity to meet them.
U.S.: The "Internal Capacity" Crisis
While the U.S. benefits from more advanced tech infrastructure, its internal divide is driven by a Capacity Crisis. The 2024 Nonprofit Digital Investments Report from NTEN reveals a troubling paradox: 45% of U.S. nonprofits report spending too little on technology, yet training constitutes merely 1% of total technology budgets. This microscopic investment in human capacity means that expensive software sits unused or underutilized, and staff burnout from inefficient processes becomes the norm.
"The nonprofit sector thrives on innovation, driven by the need to prove the impact of every spend. But in 2025, that challenge will be greater than ever," says Chris Brewer, Global Director Nonprofit at Unit4. "Digital transformation is already benefiting nonprofits, but a water-tight business case is crucial to win stakeholder support."
The Center for Effective Philanthropy's State of Nonprofits 2025 report, surveying 585 US nonprofit leaders, found that 47% cite staffing as their organization's biggest challenge, with 64% experiencing difficulty filling staff vacancies. The burnout crisis is particularly acute: 89% of nonprofit leaders express concern about burnout. As one leader described: "The intensity of trying to protect communities during COVID rolled into trying to protect those communities from a rising right-wing backlash. This goes beyond burnout — it is a psychic and physical drain on folks' ability to function."
Two Sides of the Same Coin
Despite vastly different contexts, Japanese and American nonprofits face parallel crises. In Japan, donors fund projects but not infrastructure; in the U.S., technology remains categorized as overhead rather than investment. Japanese organizations lack access to training altogether (66% receive no capacity-building support), while American organizations receive technology without training to use it (only 1% of tech budgets). In both countries, manual processes drain staff time from mission-critical work. "Transformation is difficult, because transformation is change, and change is hard," explains Rebeca Johnson of the American Heart Association. The outcome is the same: tools that don't transform operations, and communities that suffer as a result.
The Trendsetters: Building Bridges
Despite these hurdles, "trendsetters" in both nations are building bridges by moving the focus from "buying software" to "capacity development."
