Tuesday, January 26, 2010
The Economist reports that the Stichting Ingka Foundation, a Dutch non-profit-making entity, owns Ingka Holding, which is the parent for all IKEA companies including those that operate 207 of the 235 worldwide IKEA stores. While the exact value of Ingka Holding is not known, the article estimates it is approximately $36 billion - or almost $10 billion more than the value of the Bill and Melinda Gates Foundation's assets. The article also compares Stichting Ingka Foundation to the Gates Foundation in a less flattering way, noting the former's narrow focus on "innovation in the field of architectural and interior design" and lack of transparency regarding its charitable spending, which is done through another Dutch foundation, the Stichting IKEA Foundation. The article found, however, that some funds do apparently flow in a less charitable direction, as the IKEA trademark and concept are owned by a separate, for-profit company that appears to benefit unidentified private parties through a variety of channels to the tune of more than $1 billion annually. The likely beneficiaries are members of the Kamprad family (Ingvar Kamprad founded IKEA), who also control the Foundation. The primary effects of this web of arrangements appear to be secrecy, a relatively small tax bill on the profits that find their way to the for-profit company and another, related for-profit company, and takeover protection, while maintaining family control of IKEA and most of its profits.
For additional discussion, see the Tax Prof blog posting on this story and the links provided therein.