The IKEA Effect and Fundraising

01 Aug The IKEA Effect and Fundraising

1 August 2023

By David Allen, Development for Conservation

Have you ever tried to fold a square of paper into an origami crane?

If so, you can appreciate a study published in 2011 by Michael Norton of Harvard Business School. In the study, subjects were asked to fold their own cranes, using instructions provided by the researchers.

The results were, let’s say, creatively imperfect.

Then they were asked to value their creations. What would you be willing to pay for the crane you just made? Other test subjects were asked the same question about the creations. And still others were asked to value professionally folded cranes.

The results were that people who folded their own cranes valued them five times greater than other people did and about the same as the third group valued professionally-folded cranes.

This phenomenon has been observed for decades and used for centuries. It’s the reason initiation ceremonies, including hazing, work. Participants value belonging more if they have to work for it. It’s the reason Lego is so popular. It’s the reason Betty Crocker cake mixes still require consumers to add a few ingredients of their own.

People value something more when they have had a role to play in constructing it.

This is cognitive bias, and Norton named it the IKEA effect.

I think the IKEA effect is relevant in fundraising in at least two respects, first in that we tend to overvalue our own work, including our own approaches to raising money, and second in that donors will value the organizations they are supporting more when they are also involved in other ways.

In the land trust community, we live in a bubble world of our own construction. We spend anywhere from ten hours per week as volunteers to 60 hours as staff working feverishly on land deals, restoration projects, river and beach clean-ups, social media communications, fundraising, and everything else.

Plus, we are in a race against time. Against the bulldozers, against the invasives. Against changing climate conditions.

Our cognitive bias – our IKEA effect – isn’t necessarily wrong. It’s just biased. We value what we are doing more than the general public does. And that can be frustrating. Our response to that frustration – too often – is to assume that the problem lies in a lack of education.

There’s a grain of truth there, but the larger problem is a lack of engagement. Teaching more will only get us so far. We need to allow others into the construction phase, too.

From the donor’s perspective, conservation is one of many interests competing for their attention and resources. If their only relationship with the organization is as a donor, they will tend to value the organization less than if they were more involved.

This explains why fundraising professionals have been preaching donor-centricity for so long. The IKEA effect says that donors will tend to favor those organizations with which they are:

• More involved as Board members
• More involved as volunteers
• More involved in event planning and hosting
• More involved in responding to or sharing social media posts
• More involved in surveys and interviews as part of strategic planning

When donors feel more involved in constructing the organization, they will tend to value the organization more. And they will give more money.

That doesn’t mean relinquishing control. That doesn’t mean that we need to allow donors to determine when and where we protect land. In fact, later research into the IKEA effect suggested that limiting creative options – allowing participation within certain limits and boundaries – actually enhanced the experience.

So next time you’re in line at Chipotle or Cava (or IKEA!), participating in the construction of your bespoke order, think about how much more you are valuing that lunch or dinner than if it was already constructed, waiting for you to just pick it up off a shelf.

That’s a cognitive bias. That’s the IKEA effect.

Cheers, and have a great week!

-da

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