The Finances of Adoption

Well, today is our next home study meeting (at 10:45) - we had to push it back to today because Josh was running a 103 degree fever. He's better now.

Today I thought I'd tackle the finances of adoption. This will vary based on domestic and international adoption, but this will give you guys an indication of what is involved. For additional general information, click here.

For Bethany Christian services, the home study is the third time we've paid money. You pay a small fee to process your preliminary application. Then, you pay another fee to process your formal application. Finally (the point we're at now), you pay $3100 for a home study. Bethany's home studies are more expensive than a lot of other agencies, but their cost at the end is lower. So, they have a higher home study fee to help spread the cost of the adoption out a bit for the adoptive parents. At the time that you receive your child, you pay the remainder of the cost of the adoption. For us, that will be $15,000-$19,000.

So, here's a breakdown of what and when you pay money with a domestic infant/toddler adoption:

Preliminary and Formal Application Fees (for us - $650)
Family Assessment, Administrative, Educational Fees (Home Study) - $3100
Placement Fee Balance and Adoption Supervision (due at placement) - (Bethany works on a scale based on income, but we will owe - $11,250

So, how can we afford this?

Once adoptive parents have completed a home study, they are eligible to apply for all kinds of financial aid. These include grants (like Caroline's Promise for NC residents and Shoahannah's Hope which is Steven Curtis Chapman's grant foundation). Once you apply for grants there are also loans available. One example is the Abba Fund which provides interest-free loans for adopting families. Because these loans are interest-free they try and remain as the last possible way to obtain funds. And finally, the federal and most state governments provide tax credits for adoption.

The way that these tax credits work is once the adoption is finalized (which can take 6 months to a year post placement) you receive up to $12,000 from federal, and up to $6000 in tax credits from NC over the course of 5 years (minus the amount of any grants, donations, etc.). Let me explain this as it applies to us personally. For example, Matt and I will pay our adoption expenses out of pocket this year. Once the adoption is finalized (6-18 months after placement) when we file the next year's taxes, we will claim an adoption tax credit. We can claim whatever expenses we have paid in minus any grants, etc. Then, over the course of the next five years, we will receive a refund from the government for our taxes that we paid in in the amount of our expenses. This, more than anything else makes adoption affordable now.

However, while all of this is great, the problem is cash flow. What do you do until in 5 years you are reimbursed for your adoption expenses? Matt and I don't have $15,000 sitting in the bank right now. If we took out a second loan on our house to pay for this, we would end up paying a huge amount in interest, as well as be in debt and that would go on our credit. So...we do not want to go into debt during this time unless it is to the Abba Fund since that is an interest free loan, but they can only cover the few thousand at the end that you cannot raise and save for.

So, what can you do? Please pray that we stay out of debt during this time. We are also $1000 short for our home study. We cannot apply for any grants or loans until after this portion of our adoption process is complete. Would you please pray and see if God would have you give towards our adoption? This is a major leap of faith for us, and we absolutely understand if you can't, but we felt like we needed to let you guys know exactly where we were financially during this time. We spent last night coming before the Lord again and he was so clear that we were to continue this process right now and that we needed to be faithful and stay the course. Pray for our faith during this. We love you all!