The IKEA Effect: Is it only for building furniture?

The fruit of your labor can build furniture, but does it lead to building philanthropic partners?

The Ikea Effect is a term that describes the phenomenon by which people place a greater value on furniture that they have assembled themselves--it provides ownership and pride in a project, like building a table. Does the Ikea Effect work in the same way with a project or mission of an organization? Aren’t ownership and pride ingredients that are critical to successfully building philanthropic partners?

The Ikea Effect, according to Daniel Mochan at Tulane, Michael Norton at Harvard and Dan Ariely at Duke, and recently reported on NPR, is explained in this way: “Building your own stuff boosts your feelings of pride and competence, and also signals to others that you are competent.” Could this also be said of philanthropists small and large? Why do people decide to make donations? To be a part of something. To help build something. To create social change, a remedy to an immediate community need, a cure for a disease...

One challenge with the Ikea Effect in philanthropy is that the organization to which the donor is contributing must deliver a tangible product to the donor. It may be easier to build a table purchased online or from an Ikea store rather than to build a tangible result through philanthropic activity, but if that were possible, or if it were a specific focus of organizations, then maybe organizations would have more success in building the ownership and pride in their organization and therefore in truly building philanthropic partners.

Does the Ikea Effect explain why building campaigns are more successful than endowment campaigns? It is easier to be proud, have ownership and show others your competence with a tangible building than it is with an endowment. You can point to the building. So how can nonprofits make their ongoing operations and endowment campaigns more tangible to donors?

We think it is possible. Let us know your ideas.

Resources: Why You Love That Ikea Table, Even If It’s Crooked
Reporter: Shankar Vedantam