You may have heard that the Ingvar Kamprad, the founder of Ikea, passed away this weekend.

His legacy is much more than the bookcases in my offices.  One of the more obscure parts of an Ikea legacy is a cognitive bias called the Ikea Effect.

Side note: you must be ingrained in the popular culture to have an effect named for you.  The other example I can think of is the Tetris Effect, where you dream about and pattern your thoughts around an activity.

Unlike the Tetris Effect, though, the Ikea Effect isn’t about dreaming of assembling light wood furniture with wordless directions and an Allen wrench.  Rather, it’s a cousin of the endowment effect (where people value things they have more than things they don’t): people place a disproportionate value on products they create.

This effect had been observed well before Ikea, but the name became popularized after studies that found, among other things, people would pay 63% more for Ikea furniture they assembled than the same Ikea furniture assembled by an actual expert.

This effect has two implications for nonprofits: one good, one bad.

The good: The power of co-creation

If people get more out of something when they have helped create it, well, let them help create it.  This cuts against our desire to control messaging. And the brand police will almost always try to kill this type of co-creation because of this.

That said, allowing donors to create their own campaigns can be highly profitable.  A knitting blog has raised over a million donors for Doctors Without Borders with a logo for Knitters Without Borders that is a take-off on the MSF logo.  Just think what it would take your organization to approve a logo that bastardizes your logo because a knitting blog thought it would be neat.  Over a million dollars later, whatever headaches they had to endure to get it approved were probably worth it.

This doesn’t have to be this involved, however.  Even letting your constituents pick out what the year’s member card will be for the year or what images will be in your calendar can give them a sense of ownership over that item (and create a file of people who want to receive those items).

The bad: The power of self-delusion.

Buzzfeed has a list of fun Ikea fails here.  (Thanks to them for the image at right)  While most Ikea fails are not this drastic, an Ikea piece assembled by an average person will be objectively worse than one assembled by an expert.  (That’s math; that’s what average means.)

So we are willing to pay more for something worse.

How often have you heard “we can’t cut this program! We worked so hard on it!” at your organization?  Now, replace “program” with “newsletter,” “email,” “giving society,” etc.  Sadly, not everything we work hard on creates value.  I once worked on a project where 80% of donors preferred the original version, but the CEO preferred the new version she had worked on.  Results were predictable and inevitable.

As Stephen King put it, we must be willing to kill our darlings (or, at least, adapt them).  That’s why an emphasis on data and outcomes is so vital.

If an activity adds to the sum of our donors’ lifetime values, it is good.

If it adds more than an alternative, it is better.

If it subtracts, it is bad.

This will keep you from (as we’ve seen) spending the same amount on fundraising pieces and cultivation pieces, even though the former was worth 70 times more to the commitment donors had to the organization than the latter.

Tyrannical insistence on this addition of value will help you puncture the HIPPO (HIghest Paid Person’s Opinion).  Moreover, it will help you (or trusted peers) keep yourself in check – none of us are immune from the Ikea Effect.