Increasing Nonprofit Support with the IKEA Effect
Harnessing a cognitive bias to increase involvement, donations and impact
Studies have shown that people assign more value to something that they helped create versus an equivalent or better object made by a professional. Nonprofits can harness that cognitive bias to create stronger connections and raise more money.
Once someone has participated in the furthering of your mission, their personal narrative (i.e., their identity) expands to include that they are someone who supports your cause. With that new identity, they are more likely to keep supporting—through volunteering, amplifying and donating—and raising their support level as they feel more invested and a stronger connection to results (positive changes) that they want to see in the world.
What is the IKEA Effect?
And what does it have to do with nonprofits?
A little over 10 years ago, behavioral economists Michael I. Norton, Daniel Mochon, and Dan Ariely set out to examine a phenomena that had been observed and used by marketers for decades.
In the experiments, individuals who were not particularly skilled at the tasks, were asked to assemble a piece of IKEA furniture, build a lego set or fold origami. They were then asked how much they would pay for the resulting creation that they made, and how much they would pay for the same item created by a professional.
Overwhelmingly, the participants agreed to pay more—as much as 63% more—for the one they created, even though their final product was not as well done as the professionally created one. When people who were not part of the creation of the objects—and were therefore objective about the items—were asked the same question, they valued the professionally assembled item much more than the amateur imperfect one.
The researchers called this cognitive bias the “IKEA Effect.”
Objectively, of course, a professionally created object is more likely to be of higher quality in the end. But, as behavioral economists have demonstrated time and again, we make our decisions based on stories that produce emotional reactions.
The principle builds on other known cognitive biases like effort justification, in which we endow value to something based on the amount of effort it takes to attain it. It’s also thought to contribute to the “sunk cost fallacy,” in which people who have invested their resources into something are more likely to keep investing, regardless of the returns on the investment.
If you’ve ever participated in the creation of something—whether it’s decorating your house, building a model kit, writing a story, or painting a tropical landscape in a group class—you invested yourself in its outcome and it serves as a symbol of your achievement. That experience, pride and sense of ownership endows it with greater personal financial value. If you were to forget the story of how you made that item, you would also lose the greater valuation of the item.
This is a psychological effect that nonprofits need to be conscious of internally, so that we’re not surprised when outsiders don’t value our product as much as we do.
More importantly, though, it’s one that can help increase support and donations…
When people invest their time and energy, they feel a greater sense of ownership in what they create, and perceive what they create as more valuable.
Strategies for Evoking Pride and Ownership in Your Nonprofit’s Supporters
Giving a donor the opportunity to participate and feel like they have created a better world in some physical or emotional sense, will also make them more likely to value the work that you’re doing together and, therefore, support you more financially.
Once you start thinking in this way, there are countless opportunities you can create for your supporters to get more involved, put in effort, feel like they’re part of the solution, and increase their perceived value of your organization.
Here are a few suggestions to get you started
Caveat: Don’t Ask for Too Much
An important caveat to the IKEA Effect is that the experience needs to be clearly defined with an achievable successful outcome. If a task is too great and the participant can’t (or feels like they can’t) complete the task successfully, they will get discouraged and the effect will be reversed.
If you’ve ever attempted to assemble something and got that sinking feeling half way through that you were out of your depths, or had a few too many “spare parts” left over, you know this reverse-effect all too well. Rather than pride and ownership, the task becomes associated with inadequacy and even shame.
So, when it comes to asking for money or effort, make sure that the request is one that the supporter can fulfill and succeed with (also known as “a donor-size problem”). Similarly, whenever possible, correlate a donation level to an expected result.
Want to learn more about the Ikea effect and how it works? Here are a few articles to get you started:
- Psychology Today article on “Why we love things more when we build them ourselves” — https://www.psychologytoday.com/us/blog/the-shaping-us/201910/the-ikea-effect
- Download the original paper, The “IKEA Effect”:
When Labor Leads to Love, from Harvard Business School— https://www.hbs.edu/ris/Publication%20Files/11-091.pdf
- The IKEA effect on WikiPedia — https://en.wikipedia.org/wiki/IKEA_effect
And if you want to go deeper into the concepts of Behavioral Economics and Behavioral Psychology, check out Dan Ariely’s book, Predictably Irrational: The Hidden Forces That Shape Our Decisions.