The company, which develops custom Web aaplications, originally created Katipult to host a community of non-profit fundraising campaigns, said Brock Murray, JOI’s chief executive officer. “We thought it would be a lot of value to the non-profit community,” Murray said. JOI’s own non-profit, JOI to the World, puts together care packages of necessities for victims of domestic violence in the Calgary area, and has raised about $500,000 over the past five years.
“I think more people knew what JOI to the World was than JOI Media,” Murray said.
The idea might have been a little ahead of its time for the non-profit space, which doesn’t have alternative revenues streams, Murray said. At the same time, JOI’s corporate clients were expressing interest in the crowdfunding platform. “We started getting approached by a lot of corporations,” Murray said.
So JOI moved from trying to build the community to offering the technology. The company has been quietly white-labelling the offering for the last six months. It’s first customer, InvestYYC, was mandated by Calgary 2012 as a legacy project for the city’s year as Canada’s cultural capital and the 100th Calgary Stampede. (YYC is the airport code for Calgary International Airport.) The organization matches donations of up to $50,000 to Calgary arts and culture projects. InvestYYC has raised more than $200,000 for the arts in Calgary.
JOI is also working with a multinational pharmaceutical company that wants to align its brand with mental health issues, Murray said. For corporations, “cause marketing” or “cause branding” is the most common business case for crowdfunding. Most midsized and large corporations have some internal fundraising intiatives; a crowdfunding platform allows the company to engage with both internal and external stakeholders to align with a cause.
While the first few Katipult implementations had considerable customization, the company now sells it as more of a default product, leaving the customization up to the client, Murray said. And while it’s available on a software-as-a-service basis, most customers choose to host their own implementationo on site and customize it radically, Murray said. “Any developer with a little bit of PHP knowledge can maintain it,” he said.
While cause marketing may be the primary corporate business case for crowdfunding today, there’s pressure on governments in Canada to allow equity crowdfunding. Currently, only donation- and reward-based crowdfunding are legal in Canada; only accredited investors can currently take equity in a company. Several European countries allow equity crowdfunding, and in the U.S., the Securities and Exchange Commission is working out the final details of equity crowdfunding regulations.
The National Crowdfunding Association of Canada was formed to help ensure Canada doesn’t fall behind in the crowdfunding arena and is pushing the equity crowdfunding agenda. JOI will be one of the founding sponsors, Murray said.
There are many examples of donation- and reward-based crowdfunding — Murray singles out Movember, the annual fundraiser for prostate cancer research — that prove the power of the crowdfunding concept, and as legislation changes, many interesting campaigns and use cases for SMBs will come out of the crowdfunding movement, he said.