CLOSE

Is IKEA the World's Largest Charity?

If it's possible to assemble a piece of IKEA furniture without cursing at the top of your lungs, I've never seen it happen. There's always a missing piece of hardware, an unclear spot on the instructions, or an excruciating amount of hex wrenching to be done. The next time you ball your fists mid-assembly and curse all things Swedish, though, try to calm down. After all, IKEA's just another charity trying to get by.

Wait, what? You read that correctly; IKEA's technically a charity. But before you write down the umlaut-riddled name of your most recent dresser purchase as a charitable donation on your next tax return, it's worth exploring this ownership structure, which was brought to light by a 2006 article in The Economist.

IngvarKamprad.jpgIngvar Kamprad founded IKEA in Almhult, Sweden in 1943 when he was just 17 years old. Kamprad originally sold low-priced consumer goods from his home and by mail, but added a furniture line in 1948. As the company began opening its trademark sprawling stores, Kamprad grew fabulously wealthy, although he retained frugal tastes like driving an aging Volvo and always flying economy class. By some debated estimates, Kamprad is the world's richest man, and even Forbes' more conservative accounting pegs him as the seventh-richest person in the world with a net worth in the neighborhood of $31 billion.

Why can't anyone agree on how much Kamprad's worth? Well, for one he doesn't technically own IKEA anymore. In 1982, his ownership stake in the company was given to the newly formed Stichting Ingka Foundation, a Dutch charity. The foundation in turn administers the stores through Ingka Holdings, a wholly owned subsidiary that operates as a for-profit company.

With an estimated endowment of over $36 billion in 2006, the Stichting Ingka Foundation is arguably the world's largest charity. The charity's stated goal is "to promote and support innovation in the field of architectural and interior design," surely a noble aim, but it's unclear how generous its support is. It's been confirmed that the foundation has given 1.7 million Euros a year to Sweden's Lund Institute of Technology for some time, but even that amount seems fairly tightfisted in light of its gigantic endowment. In other words, if you're an aspiring architect waiting for some financial support from IKEA, you're probably better off getting a job as a cashier at one of their stores than hoping for a grant.

So what's going on here? It would seem that the entire charitable foundation is a clever, if dubious, way for IKEA to avoid paying taxes. In 2004, the company pulled in a 1.4 billion euro profit, but since it's owned by a tax-exempt charity, it didn't pay a dime. Moreover, the Byzantine structure of for-profit holding companies nestled within non-profit charities effectively safeguards Kamprad from any sort of outside takeover bids for his housewares behemoth. The five-member board of the foundation, which is headed by Kamprad, is the de facto management for all of the IKEA stores.

IKEA-dresser.jpgAll of this sounds pretty clever, but if the stores are all owned by a charity, how can Kamprad and his family make any cash off of them? Maybe he's doing all this out of the goodness of his heart after all, right? The company's been just as clever in that regard, too. If the Stichting Ingka Foundation is really just a giant piggy bank, it's got a rather sizable hole in it. While the charitable foundation owns the IKEA stores, it doesn't own the IKEA trademark or concept. These items belong to Inter IKEA Systems, a private, for-profit Dutch company. Inter IKEA Systems collects hefty franchise fees from each IKEA store; according to The Economist, these fees amounted to 631 million euros in 2004. However, thanks to a convoluted multi-national system of ownership here, too, the company ended up paying a scant 19 million euros in taxes on this huge sum.

Who owns Inter IKEA Systems and its maze of parent companies? Nobody knows. Since they're private companies incorporated in various locations, their ownership is kept secret, and IKEA's certainly not about to spill the beans. It would seem reasonable to suggest that Kamprad probably owns it.

Should we really be surprised, though? These are the same people who can make a dresser that weighs just ten pounds, fits in a box the size of a deck of cards, and sells for four dollars. Just remember, when you scarf down a two-dollar plate of Swedish meatballs after buying furniture, you shouldn't feel ashamed for pigging out. Instead, hold your head up high and know that you've made your contribution to charity today. (Wait, you have some sauce on your chin. You'll probably want to wipe that off first.)

nextArticle.image_alt|e
iStock
arrow
holidays
Yes, You Can Put Your Christmas Decorations Up Now—and Should, According to Psychologists
iStock
iStock

We all know at least one of those people who's already placing an angel on top of his or her Christmas tree while everyone else on the block still has paper ghosts stuck to their windows and a rotting pumpkin on the stoop. Maybe it’s your neighbor; maybe it’s you. Jolliness aside, these early decorators tend to get a bad rap. For some people, the holidays provide more stress than splendor, so the sight of that first plastic reindeer on a neighbor's roof isn't exactly a welcome one.

But according to two psychoanalysts, these eager decorators aren’t eccentric—they’re simply happier. Psychoanalyst Steve McKeown told UNILAD:

“Although there could be a number of symptomatic reasons why someone would want to obsessively put up decorations early, most commonly for nostalgic reasons either to relive the magic or to compensate for past neglect.

In a world full of stress and anxiety people like to associate to things that make them happy and Christmas decorations evoke those strong feelings of the childhood.

Decorations are simply an anchor or pathway to those old childhood magical emotions of excitement. So putting up those Christmas decorations early extend the excitement!”

Amy Morin, another psychoanalyst, linked Christmas decorations with the pleasures of childhood, telling the site: “The holiday season stirs up a sense of nostalgia. Nostalgia helps link people to their personal past and it helps people understand their identity. For many, putting up Christmas decorations early is a way for them to reconnect with their childhoods.”

She also explained that these nostalgic memories can help remind people of spending the holidays with loved ones who have since passed away. As Morin remarked, “Decorating early may help them feel more connected with that individual.”

And that neighbor of yours who has already been decorated since Halloween? Well, according to a study in the Journal of Environmental Psychology, homes that have been warmly decorated for the holidays make the residents appear more “friendly and cohesive” compared to non-decorated homes when observed by strangers. Basically, a little wreath can go a long way.

So if you want to hang those stockings before you’ve digested your Thanksgiving dinner, go ahead. You might just find yourself happier for it.

nextArticle.image_alt|e
iStock
arrow
Lists
11 Black Friday Purchases That Aren't Always The Best Deal
iStock
iStock

Black Friday can bring out some of the best deals of the year (along with the worst in-store behavior), but that doesn't mean every advertised price is worth splurging on. While many shoppers are eager to save a few dollars and kickstart the holiday shopping season, some purchases are better left waiting for at least a few weeks (or longer).

1. FURNITURE

Display of outdoor furniture.
Photo by Isaac Benhesed on Unsplash

Black Friday is often the best time to scope out deals on large purchases—except for furniture. That's because newer furniture models and styles often appear in showrooms in February. According to Kurt Knutsson, a consumer technology expert, the best furniture deals can be found in January, and later on in July and August. If you're aiming for outdoor patio sets, expect to find knockout prices when outdoor furniture is discounted and put on clearance closer to Labor Day.

2. TOOLS

A display of tools.
iStock

Unless you're shopping for a specific tool as a Christmas gift, it's often better to wait until warmer weather rolls around to catch great deals. While some big-name brands offer Black Friday discounts, the best tool deals roll around in late spring and early summer, just in time for Memorial Day and Father's Day.

3. BEDDING AND LINENS

A stack of bed linens.
iStock

Sheet and bedding sets are often used as doorbuster items for Black Friday sales, but that doesn't mean you should splurge now. Instead, wait for annual linen sales—called white sales—to pop up after New Year's. Back in January of 1878, department store operator John Wanamaker held the first white sale as a way to push bedding inventory out of his stores. Since then, retailers have offered these top-of-the-year sales and January remains the best time to buy sheets, comforters, and other cozy bed linens.

4. HOLIDAY DÉCOR

Rows of holiday gnomes.
iStock

If you are planning to snag a new Christmas tree, lights, or other festive décor, it's likely worth making due with what you have and snapping up new items after December 25. After the holidays, retailers are looking to quickly move out holiday items to make way for spring inventory, so ornaments, trees, yard inflatables, and other items often drastically drop in price, offering better deals than before the holidays. If you truly can't wait, the better option is shopping as close to Christmas as possible, when stores try to reduce their Christmas stock before resorting to clearance prices.

5. TOYS

Child choosing a toy car.
iStock

Unless you're shopping for a very specific gift that's likely to sell out before the holidays, Black Friday toy deals often aren't the best time to fill your cart at toy stores. Stores often begin dropping toy prices two weeks before Christmas, meaning there's nothing wrong with saving all your shopping (and gift wrapping) until the last minute.

6. ENGAGEMENT RINGS AND JEWELRY

Rows of rings.
iStock

Holiday jewelry commercials can be pretty persuasive when it comes to giving diamonds and gold as gifts. But, savvy shoppers can often get the best deals on baubles come spring and summer—prices tend to be at their highest between Christmas and Valentine's Day thanks to engagements and holiday gift-giving. But come March, prices begin to drop through the end of summer as jewelers see fewer purchases, making it worth passing up Black Friday deals.

7. PLANE TICKETS AND TRAVEL PACKAGES

Searching for flights online.
iStock

While it's worth looking at plane ticket deals on Black Friday, it's not always the best idea to whip out your credit card. Despite some sales, the best time to purchase a flight is still between three weeks and three and a half months out. Some hotel sites will offer big deals after Thanksgiving and on Cyber Monday, but it doesn't mean you should spring for next year's vacation just yet. The best travel and accommodation deals often pop up in January and February when travel numbers are down.

8. FOOD AND SNACK BASKETS

Gift basket against a blue background.
iStock

Fancy fruit, meat and cheese, and snack baskets are easy gifts for friends and family (or yourself, let's be honest), but they shouldn't be snagged on Black Friday. And because baskets are jam-packed full of perishables, you likely won't want to buy them a month away from the big day anyway. But traditionally, you'll spend less cheddar if you wait to make those purchases in December.

9. WINTER CLOTHING

Rack of women's winter clothing.
Photo by Hannah Morgan on Unsplash.

Buying clothing out of season is usually a big money saver, and winter clothes are no exception. Although some brands push big discounts online and in-store, the best savings on coats, gloves, and other winter accessories can still be found right before Black Friday—pre-Thanksgiving apparel markdowns can hit nearly 30 percent off—and after the holidays.

10. SMARTPHONES

Group of hands holding smartphones.
iStock

While blowout tech sales are often reserved for Cyber Monday, retailers will try to pull you in-store with big electronics discounts on Black Friday. But, not all of them are really the best deals. The price for new iPhones, for example, may not budge much (if at all) the day after Thanksgiving. If you're in the market for a new phone, the best option might be waiting at least a few more weeks as prices on older models drop. Or, you can wait for bundle deals that crop up during December, where you pay standard retail price but receive free accessories or gift cards along with your new phone.

11. KITCHEN GADGETS

Row of hanging kitchen knives and utensils.
iStock

Black Friday is a great shopping day for cooking enthusiasts—at least for those who are picky about their kitchen appliances. Name-brand tools and appliances often see good sales, since stores drop prices upwards of 40 to 50 percent to move through more inventory. But that doesn't mean all slow cookers, coffee makers, and utensil prices are the best deals. Many stores advertise no-name kitchen items that are often cheaply made and cheaply priced. Purchasing these lower-grade items can be a waste of money, even on Black Friday, since chances are you may be stuck looking for a replacement next year. And while shoppers love to find deals, the whole point of America's unofficial shopping holiday is to save money on products you truly want (and love).

SECTIONS

arrow
LIVE SMARTER
More from mental floss studios