Excellent NPOs are not-for-profit organizations that fulfill the following conditions:
"Excellent NPOs are not-for-profit organizations that challenge social issues based on their missions. Their activities are outcome-based and these activities are widely supported by citizens. While maintaining structural stability, they are also ambitious for innovations. These organizations' structural stability and abilities to innovate let them tackle social issues effectively."

The People's Conference has been critical of the recent trends in Japan's social sector.
The number of not-for-profit organizations in Japan has been rapidly increasing, and this has certainly brought about diversity in missions, actors, types of activities in the non-profit sector. However, ideal practices in the non-profit sector are becoming increasingly harder to identify. It is also hard for not-for-profit organizations to evaluate and improve their activities, since there is no widely recognized measure to do so.

Thus, we decided to identify and publicize ideal operations in the non-profit sector by creating the concept of Excellent NPOs. We also decided to create an environment in which not-for-profit organizations are motivated to become outstanding actors of civil society. This will be realized by our newly established prize, The Excellent NPO Awards.
In order to create a model image of ideal not-for-profit organizations, we incorporated concepts from Non-profit Organization Theory into our analysis of current issues in the non-profit sector in Japan. That is how the concept of Excellent NPOs was created.