Time is drawing near to file an application for the Alaska Permanent Fund dividend — the deadline to do so is March 31. In addition to being a much-cherished yearly check, the dividend is a reminder of Alaska’s resource wealth and a tangible nod to the state Constitution’s direction to manage those resources for the maximum benefit of residents. When it comes to the dividend, however, ensuring that benefit falls to the state’s people themselves — the dividend check spends like any other, and it’s up to recipients to choose how best to allocate it. Every year, some are invested wisely and others squandered. Fortunately, Alaskans are provided easy options that can provide benefit to themselves and others.
The permanent fund was created by an amendment to the state Constitution in 1976 with the intent of safeguarding a portion of Alaska’s oil wealth for the benefit of future generations. Under the amendment, 25 percent of oil revenue was set aside in a protected account that could only be used for income-generating investments. The purpose of the fund was to generate income that would benefit the state. Although Alaska’s nonrenewable oil wealth would be depleted, revenue from the permanent fund’s earnings would help buoy future generations.
In 1980, the state developed the permanent fund dividend program, each year devoting a portion of the fund’s earnings directly to individual state residents. These payments take the form of an annual check; the first was issued in 1982. Any Alaskan who has lived in the state for a full calendar year and has not been convicted or incarcerated is eligible to receive the dividend.
As you might imagine, what people choose to do with their annual windfall — and, if they are parents, those of their children — is highly varied. Some spend the check on necessities like groceries or fuel, while others use the income to travel or buy material goods such as cars, furniture or appliances that they would otherwise have difficulty being able to afford.
Given the spirit of the permanent fund’s creation, however, it’s worth giving consideration to dividend uses that have a strong public benefit and also ones that will help future generations. Two such programs are available to residents within the dividend application itself: Pick.Click.Give. and the Alaska College Savings Plan.
Pick.Click.Give. is a recent option for those receiving dividend checks — and a worthy one. The program allows Alaskans to devote a portion of their check to charities or nonprofit organizations of their choice. The best part is the long list of local organizations to which funds can be devoted, providing benefits close to home. That list is too long to include here but can be easily found at the program’s website: www.pickclickgive.org.
Another plus of Pick.Click.Give. is that you can still add or change recipients of your donations even if you’ve already applied for the dividend. The dividend application deadline is in four days, but you can modify donations to Pick.Click.Give. until Aug. 31.
Another good option, especially for parents, is the Alaska College Savings Plan. The plan, run as a cooperative effort between finance company T. Rowe Price and the University of Alaska, lets you put money toward the college education of a beneficiary. Often this beneficiary is a child whose parents put their dividend checks into the plan to defray future college expenses, but the plan allows for beneficiaries to be any U.S. citizen. And the plan has a special benefit if a beneficiary enrolls at the University of Alaska for college: a tuition value guarantee means that beneficiaries can lock in tuition credits at the time money is put into the plan, even if future tuition hikes outpace the plan’s earnings — which they virtually always do. Thousands of Alaskans have been able to attend college thanks to the plan and permanent fund dividend deposits from their parents and others looking out for them. Donations to the plan are not tax free, so make sure to set a little aside.
Make sure you apply for your dividend if you haven’t already, but also give a thought to how you’ll put it to use. It’s wise to think about the dividend’s benefits and its potential to help out in the future.
— Fairbanks Daily News-Miner,
March 27
