Declining Oil Revenue, Budgets Pressures Alaskans’ Giving

February 3, 2016       Andy Segedin      

Alaskans have donated $13.8 million to charity during the past seven years through the Pick. Click. Give. program, a giving mechanism that enables residents to donate a portion of their Permanent Fund Dividend (PFD) to local causes. The program has grown each year since its inception in 2009, but efforts to address the state’s budget deficit might cut into PFDs, which are given annually to those who reside in the state for a full calendar year.

PFDs have ranged from $878 to $2,072 per resident since Pick. Click. Give. began, according to Laurie Wolf, president and CEO of The Foraker Group, which serves as Alaska’s nonprofit association and which advocated for the program’s creation. Dividends are managed like an endowment, with a percentage of interest earnings from Alaskan oil distributed equally to residents.

Alaskans applied for 552,260 PFDs during 2015 and 33,570 chose to donate a total of $3.3 million, according to the program’s website.

Alaska Gov. Bill Walker has proposed a “replumbing” of the state’s financial system, according to Randall Hoffbeck, commissioner of the Alaska Department of Revenue. The proposal includes a recalculation of PFDs, which are based on a five-year average of realized gains. The amount would instead be based on a 0.5 percent royalty revenue of natural resources. The adjustment would push PFD payouts to $1,000 or less per resident as compared to 2015’s figure of $2,072.

Reassessment of state finances has been brought on by two drivers, Hoffbeck said, a reduction in oil production and the fact that revenue from prior investment of oil money now outpaces revenue brought in by new oil production. With $50 billion sitting in the fund and the state facing a $3.6 billion deficit, it has become necessary to use fund resources to balance the state budget.

The Alaskan Legislature opened a 90-day session on Jan. 19. It is the governor’s office’s hope that a plan based on the governor’s proposal is agreed upon in that time. Hoffbeck anticipates PFDs to be a major element of the discussion.

Alaskans will be applying for dividends and setting charitable contributions aside during that time, a process that will run through March 31, Wolf said. The Foraker Group plans to continue to monitor, stay connected with and support the program through potential changes.

The three goals of the program upon its launch were to increase the number of individuals giving, the amount given, and awareness around individual philanthropy, according to Wolf. Through the progress of those goals, there is hope that giving will not take a hit no matter the changes to PFDs.

Jason Grenn, manager of Pick. Click. Give., and Nina Kemppel, president and CEO of The Alaska Community Foundation which operates the program, concur with Wolf’s optimism. Grenn and Kemppel both cited the continued upward trajectory of participants and amount raised through the program when PFDs slipped from $1,281 and $1,174 in 2010 and 2011, respectively, to $878 and $900 in 2012 and 2013, respectively.

“My heart tells me that Alaskans know when times are tough, they know when times are tough for neighbors,” Grenn said. “We’ve all been stuck in the snow and helped others stuck in the snow … Alaskans know that they can step up in ways others can’t.” Grenn added that he was also encouraged by the amount of room the program has to grow, with a large percentage of Alaskans not yet donating through the program despite annual increases in participation.

Pick. Click. Give. has focused awareness and marketing efforts toward the notion that, with 640 causes to choose from, Alaskans can find something that touches their lives when giving. Pushing forward, it will be the input of state nonprofits that will help carry the program further, Grenn said. “Pick. Click. Give. is just a website, just a tool,” he said. “Even if this year we see some changes, I think nonprofits are going to do a great job of [explaining] why, maybe more than ever, Pick. Click. Give. is a great tool to use to improve their community.”

Bean’s Café, an Anchorage-based day shelter and soup kitchen, has been the top beneficiary of the Pick. Click. Give. program in recent years, with $410,025 gifted from 2013 through 2015. The soup kitchen depends on PFD donations, according to Lisa Sauder, executive director. The café, combined with The Children’s Lunchbox program which addresses youth nutrition, has a combined annual budget of $3 million.

The café provides an average 300,000 meals per year and Sauder is conscious that, in addition to potentially impacting giving, any change to PFDs could also cause an increased need for services. Accommodating additional growth is part of Bean’s Café’s three-year plan and a new space has been secured to prepare meals for The Children’s Lunchbox.

The service provides an average of 10,000 food packages per month, with summer spikes north of 25,000. To date, the meals have been prepared in a 300-square-foot kitchen. Bean’s Café purchased a building with a 4,000-square-foot space from reserves for $570,000 and are more than three-quarters through a $1.9 million capital campaign launched in October to prepare the building for service.

Bean’s Café has long been dependent on community support, with the vast majority of food served being donated. Sauder believes that Alaskans will continue to support the program through fiscal challenges. “We have over 16,000 individual donors. We are really that organization that lives on the $100 donation,” she said. “People are very invested in what we do.” NPT