Is IKEA the World's Largest Charity?

iStock
iStock

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.

Ingvar 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.

All 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.)

Take Advantage of Amazon's Early Black Friday Deals on Tech, Kitchen Appliances, and More

Amazon
Amazon

This article contains affiliate links to products selected by our editors. Mental Floss may receive a commission for purchases made through these links.

Even though Black Friday is still a few days away, Amazon is offering early deals on kitchen appliances, tech, video games, and plenty more. We will keep updating this page as sales come in, but for now, here are the best Amazon Black Friday sales to check out.

Kitchen

Instant Pot/Amazon

- Instant Pot Duo Plus 9-in-115 Quart Electric Pressure Cooker; $90 (save $40) 

- Le Creuset Enameled Cast Iron Signature Sauteuse 3.5 Quarts; $180 (save $120)

- KitchenAid KSMSFTA Sifter with Scale Attachment; $95 (save $75) 

- Keurig K-Mini Coffee Maker; $60 (save $20)

- Cuisinart Bread Maker; $88 (save $97)

- Anova Culinary Sous Vide Precision Cooker; $139 (save $60)

- Aicook Juicer Machine; $35 (save $15)

- JoyJolt Double Wall Insulated Espresso Mugs - Set of Two; $14 (save $10) 

- Longzon Silicone Stretch Lids - Set of 14; $13 (save $14)

HadinEEon Milk Frother; $37 (save $33)

Home Appliances

Roomba/Amazon

- iRobot Roomba 675 Robot Vacuum with Wi-Fi Connectivity; $179 (save $101)

- Fairywill Electric Toothbrush with Four Brush Heads; $19 (save $9)

- ASAKUKI 500ml Premium Essential Oil Diffuser; $22 (save $4)

- Facebook Portal Smart Video Calling 10 inch Touch Screen Display with Alexa; $129 (save $50)

- Bissell air320 Smart Air Purifier with HEPA and Carbon Filters; $280 (save $50)

Oscillating Quiet Cooling Fan Tower; $59 (save $31) 

TaoTronics PTC 1500W Fast Quiet Heating Ceramic Tower; $55 (save $10)

Vitamix 068051 FoodCycler 2 Liter Capacity; $300 (save $100)

AmazonBasics 8-Sheet Home Office Shredder; $33 (save $7)

Ring Video Doorbell; $70 (save $30) 

Video games

Sony

- Marvel's Spider-Man: Game of The Year Edition for PlayStation 4; $20 (save $20)

- Marvel's Avengers; $27 (save $33)

- Minecraft Dungeons Hero Edition for Nintendo Switch; $20 (save $10)

- The Last of Us Part II for PlayStation 4; $30 (save $30)

- LEGO Harry Potter: Collection; $15 (save $15)

- Ghost of Tsushima; $40 (save $20)

BioShock: The Collection; $20 (save $30)

The Sims 4; $20 (save $20)

God of War for PlayStation 4; $10 (save $10)

Days Gone for PlayStation 4; $20 (save $6)

Luigi's Mansion 3 for Nintendo Switch; $40 (save $20)

Computers and tablets

Microsoft/Amazon

- Apple MacBook Air 13 inches with 256 GB; $899 (save $100)

- New Apple MacBook Pro 16 inches with 512 GB; $2149 (save $250) 

- Samsung Chromebook 4 Chrome OS 11.6 inches with 32 GB; $210 (save $20) 

- Microsoft Surface Laptop 3 with 13.5 inch Touch-Screen; $1200 (save $400)

- Lenovo ThinkPad T490 Laptop; $889 (save $111)

- Amazon Fire HD 10 Tablet (64GB); $120 (save $70)

- Amazon Fire HD 10 Kids Edition Tablet (32 GB); $130 (save $70)

- Samsung Galaxy Tab A 8 inches with 32 GB; $100 (save $50)

Apple iPad Mini (64 GB); $379 (save $20)

- Apple iMac 27 inches with 256 GB; $1649 (save $150)

- Vankyo MatrixPad S2 Tablet; $120 (save $10)

Tech, gadgets, and TVs

Apple/Amazon

- Apple Watch Series 3 with GPS; $179 (save $20) 

- SAMSUNG 75-inch Class Crystal 4K Smart TV; $998 (save $200)

- Apple AirPods Pro; $169 (save $50)

- Nixplay 2K Smart Digital Picture Frame 9.7 Inch Silver; $238 (save $92)

- All-New Amazon Echo Dot with Clock and Alexa (4th Gen); $39 (save $21)

- MACTREM LED Ring Light 6" with Tripod Stand; $16 (save $3)

- Anker Soundcore Upgraded Bluetooth Speaker; $22 (save $8)

- Amazon Fire TV Stick with Alexa Voice Remote; $28 (save $12)

Canon EOS M50 Mirrorless Camera with EF-M 15-45mm Lens; $549 (save $100)

DR. J Professional HI-04 Mini Projector; $93 (save $37)

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How Much Is the Earth Worth?

The New York Public Library, Unsplash
The New York Public Library, Unsplash

Our home planet may be the most precious place we know, but it isn't priceless. The Earth's resources and the value it offers to humans add up to some unknown, tangible cost. The species may never have to worry about buying or selling the world, but thinking of it in terms of concrete numbers can help us better understand its value. Now, as Treehugger reports, one scientist has developed a special formula that allows us to do just that.

According to the calculations of Greg Laughlin, an assistant astronomy and astrophysics professor from the University of California, Santa Cruz, the Earth is worth roughly $5 quadrillion (or $5,000,000,000,000,000). He came up with that price after gauging the planet's mass, temperature, age, and other factors that directly correlate to its ability to sustain life.

To emphasize just how valuable the Earth is, Laughlin also estimated the worth of other planets in our solar system. Our nearest neighbor Mars costs about the same as a used car at $16,000. That's a fortune compared to Venus, which he appraised at the meager value of one cent.

Laughlin doesn't expect these numbers to have applications in the real world. Rather, he hopes they will inspire people to better appreciate the only home they know. He's not the first person to put a massive, hypothetical price tag on something just for fun. The cost of the Death Star from Star Wars has been calculated at $852 quadrillion—many times Laughlin's estimate for Earth.

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