The cost of adoption has skyrocketed in the last decade, with many adoptions topping $40,000. In today’s tough economy, being able to save up that kind of money early in life to fund an adoption is a tough challenge.
According to the ABBA Fund, 33% of Americans consider adoption, but 79% of those are concerned about the costs of adoption, and therefore only 2% take any action. Where do you turn then if you have a heart for adoption, but not the funds needed to complete the process?
Here are five untraditional ways to afford adoption so you can start adopting despite the costs.
Adoption grants are based on financial need, and for those who qualify they can offer some much-needed assistance. A grant is a fantastic way to fund an adoption because grant money doesn’t have to be paid back… ever.
There are hundreds of organizations that offer grants, and while some organizations have strict qualifications for grantees, not all do. No matter what your situation is, there is likely an adoption grant waiting for you.
A good place to start your search is on Fund Your Adoption. Lori and Jeremy started Fund Your Adoption in 2012 after being swamped with details while trying to find ways to afford adoption.
Fund Your Adoption offers a ton of great tips and resources for families who need help with the cost of adoption, and the couple offers loads of wisdom based on their own experience.
Here are a few of the most popular grant organizations:
Help Us Adopt - this organization offers adoption grants for everyone, married or single and regardless of religion
Gift of Adoption Fund - this organization offers grants ranging from $2-$5K and accepts all people
Show Hope - this organization awards grants averaging $5K
A Child Waits Foundation - this organization awards grants ranging from $1-$5K and offers grants for everyone
Crowdfunding is no longer reserved for Kickstarter-type projects featuring the latest and greatest gizmo. Crowdfunding has now become a popular tool to raise money to adopt children. All you need is a great network of friends and family to help get the word out, and a compelling story that people will want to get behind.
The beauty of crowdfunding is that you aren't limited to funding based on your financials, faith, or marital status. Companies like Pure Charity offer an easy-to-use platform to raise an unlimited amount of funds online.
Pure Charity takes 5% of your fundraising to pay for fees and administration costs. In exchange, they offer a site with tools like videos and how-tos, and any funds raised can go directly to an adoption agency that you name. This ensures that the funds raised might also qualify to be tax-deductible to the donor. (Check with your CPA before you set up your campaign to make sure you qualify for tax-deductibility.)
3. Tax Credits
Most people adopting don’t realize that they will qualify to receive a tax credit. The credit can be quite substantial, too. In 2016, you can claim up to $13,460 in adoption tax credits for qualified adoption expenses. The list of qualified expenses is long and includes things like adoption fees, court fees and travel costs. The tax credit works for all types of adoption including international, domestic and foster-to-adopt programs.
The tax credit could certainly help make a dent in those expensive costs, but you will want to make sure you keep excellent records, receipts and details of any costs that you expect to use towards the tax credit. You can hand all those documents over to your CPA at tax time.
One word of caution: the adoption tax credit is a heavily audited item on tax returns, because many people have abused it and falsified information. The best advice is to use a CPA or accountant the year that you file for the tax credit, just in case you’re audited later.
If you are unable to secure grant money, or just need to fill a gap in funds for adoption, loans can be the answer. Loans are commonly used to fund the costs of adoption before you would file your tax return and receive the tax credit, and the funds can be used however you need them in the process. You’ll probably want to exhaust grants and any crowdfunding ideas before you explore loans, unless the idea of putting your adoption story online sounds like a terrifying proposition.
There are two types of loans: interest-free and low-interest. As with any loan, you need to make sure that you can afford the monthly payments once the loan is in the repayment mode.
Interest-free loans are always the preferred method of funding, and there are a couple of great options. ABBA Fund offers loans ranging from $6,000-$8,000 for Christian families while the Hebrew Free Loan Association offers loans up to $15,000 for Jewish families.
If you can’t get an interest-free loan, low-interest loans will be your next stop. One of the most competitive interest rates is with A Child Waits, which offers up to $10,000 in funding and charges 3% interest. You have a 5-year repayment window, but no penalty for prepayment of the loan. That is still lower interest than most credit cards would charge.
If all else fails, good ole’ fundraising might do the trick. There are stories after stories of couples that raised enough money for adoption just through fundraising events alone.
Some of the more popular are car washes, dinners and auctions, and T-shirt selling campaigns. Credit card rewards points are also a great way to fund adoption. If you configure your spending properly, you could earn a significant amount each year in rewards points that can be traded in for cash and used towards expenses.
The good news is that you don’t have to wait until you win the lottery to afford to adopt a child and start your family. With so many resources, it’s very possible to fund the cost of adoption without having to risk financial disaster. All it takes is a bit of research, coupled with a lot of persistence, to bring to life your dream of starting a family.