Woodward, the founder of the Atlanta Community Toolbank, an Atlanta-based nonprofit dedicated to providing funds for other nonprofits to help them expand their impact, talked about the issue at the Buckhead Business Association’s weekly breakfast meeting Thursday at City Club of Buckhead.
Social enterprise is the practice of merging the nonprofit and for-profit worlds so a business can be sustainable while serving greater good. But today it is growing at an astronomical rate
“What are the sizes of the social enterprise market?” Woodward said. “Projections are as large as $600 billion in five to 10 years, 1 percent of the $60 trillion in managed assets [in America], while U.S. philanthropy is only $300 billion. J.P. Morgan, in its 2010 report, calls for social enterprise investments to be placed in a separate class for investment managers.”
The drivers of social enterprise are money, scale and impact, the Virginia-Highland resident said.
“If you have an opportunity to set up incremental change and have an impact, that’s great,” he said. “The old way was to donate 5 percent a year and make a small impact. [Today] it’s people who want to make a difference now.”
Woodward said he became passionate about social enterprise 25 years ago, “when I was studying for the bar exam and was bored.”
“I was working for Affordable Housing,” he said. “I was so disappointed with the way it was run that I started my own [nonprofit].”
That nonprofit, Community Development Inc., now HouseProud, is an Atlanta-based nonprofit that helps provide residents with affordable housing.
A 1987 graduate of the University of Notre Dame Law School, Woodward is an attorney and a member of the corporate practice group at Taylor English, a southeast Cobb County-based law firm, where he represents small and mid-sized Georgia companies. He is also founder of the Atlanta Community Toolbank, an Atlanta-based nonprofit dedicated to providing funds for other nonprofits to help them expand their impact.
Woodward compared the funding of nonprofits with that of for-profit businesses, then showing how they could be combined through social enterprise. It is “creative blend of the two types of businesses.”
“What is the demand for social enterprise? Consumers, investors and entrepreneurs.”
Woodward then cited examples of nonprofits appealing to investors with social enterprise, including the Center for the Visually Impaired, a Midtown-based nonprofit helping the blind and visually impaired get jobs in metro Atlanta.
“There are statistical studies showing that 70 or 80 percent of consumers polled, when price and quality are the same, will go to the company that has a social purpose to it,” he said.
Woodward also cited some examples of these for-profit companies, including Better World Books, an 11-year-old, Indiana-based business with an office in Alpharetta. It “sells used books to support world literacy,” he said.
“They did not make a profit their first six years, but they’re now a $60 million company,” Woodward said.
The state uses social enterprise through angel investor tax credits. Crowdfunding, the practice of pooling funds to invest in for-profit companies and nonprofits, is now legal in Georgia. Benefit corporations, companies that become nonprofits, could be legal as early as next year. The Georgia General Assembly during its 2014 session plans to introduce a bill to legalize benefit corporations, Woodward said, adding 18 other states already allow it.
Association President Brian Daughdrill was asked about the impact Woodward’s speech had on its members and guests.
“His presentation was eye opening because all too often business owners don’t think beyond the box, so to speak, about how there can be good done for the community in a for-profit situation,” Daughdrill said. “His presentation kind of highlighted the fact that there’s this whole new generation of business owners that are both trying to advance a social good and make a profit while doing so. I think one of the big things is those are not mutually exclusive.”