Breaking the Stalemate Structure of the Social Sector: What is 'Compound Interest Thinking'? – Harvard Social Enterprise Conference Return Report Held

The Dream Investment Foundation (Location: Iida City, Nagano Prefecture, Representative Director: Dai Tanabe) held an online "Harvard Social Enterprise Conference Return Report" (28 registered participants) on Friday, March 27, 2026, from 7:00 PM to 9:00 PM (JST) via Zoom. Representative Director Dai Tanabe presented proposals for the sustainable development of Japan's social sector, based on his learnings from the global Social Enterprise Conference (SECON2026, approximately 300 participants) held at Harvard University in the United States from February 28th to March 1st. He argued that the structure where budgets and achievements are reset annually leads to stagnation in the non-profit sector, emphasizing the importance of 'Compound Interest Thinking,' which amplifies social value multiplicatively over time, and the 'mechanisms' essential for its practice.

Mr. Tanabe's participation in SECON marks his 24th consecutive year since 2003 (the longest in history), and at the 2026 conference, he was featured in a video interview on the official conference SNS as the first Japanese national to do so.

1. Why 'Compound Interest Thinking'? – Structural Challenges Facing Japan's Social Sector

In Japan's social sector, many grants and commissioned projects are structured to be completed within a single fiscal year. Budgets are spent annually, staff members are transferred, and accumulated knowledge and relationships are reset. Mr. Tanabe points out that the repetition of this 'annual reset' hinders the entry of young people and leads to stagnation in the sector as a whole.

The opposite of this structure is 'Compound Interest Thinking.' This is a concept that applies the principles of compound interest, known in finance, to personal growth, business operations, and social change. It is based on the principle that by enduring the initial stages where short-term results are difficult to see and accumulating small improvements, one can surpass a 'critical point,' leading to accelerated change. At the return report meeting, an interview video of pitcher Yusei Kikuchi was introduced as a good example.

Furthermore, this proposal does not negate the value of the efforts at the local non-profit level. Rather, it is a call to establish 'mechanisms' that structurally reward the efforts of those on the ground, making it easier for young people to participate, and enabling sustainability and development.

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