JUNEAU -- The price tag for the Pick-Click-Give program, which allows Alaskans to donate to a portion of their Permanent Fund dividend to charities, is raising eyebrows in the state Legislature.

Lawmakers created the program in 2008 at the urging of the Rasmuson Foundation, the big Anchorage-headquartered philanthropic organization. Rasmuson pitched in about $900,000 to create, promote and run it for the first three years and other groups put in additional money, for a total of about $1.2 million.

Now Rasmuson says it's time for the state to take it over. But the House Finance Committee last week balked at the estimated $132,000-a-year cost to continue Pick-Click-Give, considering that it generated just $545,000 for charities the first year.

"We'd almost be better off writing a check straight to the organizations running the programs," said state Rep. Mike Hawker, an Anchorage Republican who co-chairs the powerful committee. He said that's an "awful burden" for the state, considering a relatively small return.

But backers say the project has been a success after only two years. In the first year, about 1 percent of Alaskans who applied for their dividend on the Web donated to a charity through the program. This year, nearly 2 percent of the people filing online are using the program to donate, not counting applications filed the first few days when the Web site wasn't working properly, according to Jordan Marshall, Rasmuson Foundation initiatives and special projects manager.

"Pick-Click-Give is an enormously popular program," Marshall told lawmakers last week.

In comparison, if 1 percent or 2 percent of the people solicited by mail for donations followed through, that would be an "extremely good return," said Michele Brown, president of United Way of Anchorage.

Also consider that the program only targets people who file for a dividend online and that children, a large portion of the applicants, generally won't be donating, said Diane Kaplan, Rasmuson Foundation president.

"Our wildest dream was that at some point we'd have 5 percent," she said.

The goal of the program is to get more people to donate in a state where charitable giving is dismally low, Kaplan said.

For a few days at the start of the application period this year, a technical glitch prevented people from making donations. A fix is in the works to allow those affected to go back and donate; it's still being tested to make sure it can handle the expected load, Marshall said.

Alaskans can apply for their dividends from Jan. 1 through March 31. As of last week, 5,325 people out of 348,010 applicants had asked for part of this year's dividend to go to a charity.

The Rasmuson Foundation is studying the program to see the effect on donations overall, but already knows that some people are donating for the first time to a particular charity, Marshall said.

State Rep. Mike Kelly, R-Fairbanks, said he would support continuing Pick-Click-Give only if the state can run it without spending extra money.

Debbie Bitney, director of the state Permanent Fund Dividend Division, said that would be impossible. She is seeking a full-time computer programmer to maintain it at a cost of about $84,000, plus $43,000 to pay contractors. Around $20,000 goes to the United Way to evaluate charities and provide a list of which ones meet state standards and a like amount goes to The Foraker Group to work with charities and maintain a Web site about the program, according to Brown.

"We anticipate that the program isn't going to become any less complex," Bitney told the Finance Committee.

The Pick-Click-Give experiment will end next year if the Legislature doesn't extend it this session or next.

Rep. Bill Thomas, a Republican from Haines who sponsored the original bill in 2008, is asking his colleagues to continue the program.

"I think that people's generosity, which is the giving side, will be the overriding side," Thomas said.

Some lawmakers wondered if Rasmuson could keep paying for Click-Pick-Give. Kaplan said the foundation has put in significant money already. Any further support would have to go before the foundation board, which next meets in the summer.

Hawker suggested that lawmakers consider raising application fees for charities that want to participate, and Thomas said that will likely be part of the solution.

Currently, charities must pay $50. But if the application fee went up to $150, it would cover the costs of figuring out which ones are eligible and other contractor work, though not the costs of a programmer, Marshall said.

Only verified charities can participate and the United Way of Anchorage is being paid to figure out which ones meet the standards established in law and regulation. Under current law, the charity must be in operation in Alaska for at least two years, file a publicly available nonprofit tax report to the IRS, provide a financial audit and have a board made up completely of Alaskans.

Marshall told legislators some changes are needed, which are outlined in Thomas' amendment. Faith-based charities like The Salvation Army don't have to file a public tax report so should be exempt from that requirement. Boards should be made up mainly of Alaskans but shouldn't have to be all Alaskans.

Brown said Monday that the United Way can't absorb the cost of checking out the charities. Many more want to participate in Pick-Click-Give than the number funded by her organization and the standards are different, she said.

Of those that received money in 2009, about 275 took in more than $150, Brown said. Some got thousands.

Thomas predicted Pick-Click-Give would generate $1 million this year.