Editor’s note: This article was originally published in 2017.
My spouse and I always planned to expand our family through adoption. At first we assumed it would require saving up thousands of dollars, yet we had very little in savings.
Still, we found a way.
Fast forward several decades: I parent 10 children, six of whom are adopted. I also run an adoption agency; overall, I’ve been involved in more than 1,200 adoptions.
Throughout my years as both an adoptive parent and an adoption professional, I’ve observed that the perceived high price of adoption is one of the largest worries for many hopeful adoptive families.
Yes, adoption can be costly. Depending on the type and circumstances of your adoption, expenses can range from nothing to more than $40,000.
But even though adoption can be expensive, it’s not unattainable.
Below are several practical and creative ways to fund your adoption.
10 Ways to Reduce the Cost of Adopting a Child
1. Use the Federal Adoption Tax Credit and Employer Income Exclusion
There are two key federal tax advantages: a credit for adoption-related costs and an income exclusion for employer-provided adoption assistance.
In 2019 the maximum tax credit for qualifying expenses was $14,080 per adoption. The credit applies to costs such as agency and attorney fees and travel related to the adoption.
You can apply the credit against your tax bill for the year and, if the credit exceeds your liability, carry it forward for up to five years.
Always verify details with a tax professional or the IRS to ensure accuracy.
2. Review Your Employer Benefits
Many companies don’t publicly promote adoption benefits. It’s worth probing your benefits package or speaking with HR to discover what might be available.
Some employers provide reimbursement for adoption expenses or offer paid leave in addition to regular vacation to help with travel and bonding time.
3. Pick an Agency With a Sliding Fee Structure
Some adoption agencies charge a uniform flat fee, while others adjust charges based on your financial situation.
You could save money by choosing an agency that uses a sliding-scale fee system calculated from your assets and income. This approach makes adoption more achievable for families of varying means.
4. Check State Adoption Subsidies
Many states offer subsidies to families who adopt children born in the U.S. with special needs or who have spent a specified time in foster care.
If you’re pursuing a subsidy, your application must demonstrate that the child’s situation justifies assistance. You’ll need medical documentation of disabilities and an explanation of the challenges the child may face.
Within a state, counties can differ in their subsidy rules and contributions. The North American Council on Adoptable Children provides a summary of state adoption subsidy profiles for reference.
5. Consider Fundraising Carefully
Raising funds can bring needed attention to your adoption and help with costs.
Faith communities and local organizations sometimes eagerly support fundraising efforts, hosting bake sales, bingo nights, carnivals or other events to help you raise money.
However, fundraising can have drawbacks. It may invite awkward questions or commentary from your circle and community.
People might speculate about your finances or wonder if raised monies are being used solely for adoption. Be mindful of the potential discomfort and privacy concerns before pursuing public fundraising.
6. Look Into Adoption Grants
Several national nonprofits provide grant opportunities to assist prospective adoptive parents. Consider these possibilities:
- Gift of Adoption Fund — Grants average around $3,500.
- Help Us Adopt — Eligible families may receive up to $15,000 toward adoption costs.
- National Adoption Foundation — Applicants can request grants up to $2,000 or loans up to $50,000.
7. Consider Loans
There are several loan options geared toward adoption expenses, including:
- A Child Waits — Offers loans up to $7,000.
- Pathways for Little Feet — Provides interest-free loans repaid according to each family’s situation.
You might also explore mortgage refinancing or a home-equity loan; interest on some loans may be tax-deductible.
8. Accept Financial Help From Family
Many adoptive families receive monetary gifts or interest-free loans from relatives, including grandparents, aunts, uncles and siblings.
For our first adoption, an uncle loaned us $5,000, and my grandmother co-signed another loan.
Family members can be a valuable source of support throughout the adoption process.
9. Tap Into Personal Assets
You may have trusts, inheritances, or the option to borrow against a life insurance policy.
Consider your 401(k) as another source. While borrowing from retirement savings may seem extreme, it often avoids application fees and can be repaid through payroll deductions over up to five years—without affecting your credit score.
However, many caution against using retirement accounts because it undermines long-term savings and carries the risk of taxable consequences if you default.
10. Work With an Agency That Doesn’t Require a Placement Deposit
Some agencies require an upfront deposit toward placement fees before a child is matched to you.
That can be a heavy burden if funds are limited, especially for services not yet rendered.
Seek agencies that request placement fees only once a child is actually placed in your home.
Don’t Let Cost Keep You From Adopting
Adoption isn’t the right path for everyone. But if you’re drawn to it, don’t dismiss the idea solely because of cost concerns.
Talk with adoption professionals about your choices. Do your homework. Connect with adoptive parents and learn from their experiences. You can also find helpful resources to bail out friends that may offer guidance on support networks and fundraising ideas.
Despite financial hurdles, costs shouldn’t prevent you from building your forever family.
Michele Andrews is the founder and CEO ofAdoption STAR, a COA Hague-accredited nonprofit adoption agency licensed in New York, Florida and Ohio dedicated to helping create forever families.
