Think You Can’t Afford Adoption? Here Are 10 Surprising Ways to Pay for It

This illustration shows a woman hugging her adopted female child.
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Editor’s note: This article was originally published in 2017.

My husband and I always knew we wanted to grow our family through adoption. We originally thought this meant we’d need to save thousands of dollars, but we had little money to our names. 

Still, we made it work.

Fast forward a few decades: I have 10 children, six of whom are adoptees. I’m also the founder and CEO of an adoption agency; in all, I’ve been a part of over 1,200 adoptions.

In my many years as both an adoptive mom and an adoption professional, I’ve found that the high cost of adopting a child is one of the biggest fears many prospective adoptive parents have.

Yes, it’s true: Adopting a child can be expensive. Depending on the specifics of your adoption, fees can range anywhere from $0 to over $40,000.

But, pricy as adoption can be, it’s not impossible. 

Here are a few of the many ways to creatively finance your adoption.

10 Ways to Make Adopting a Child More Affordable

1. Take Advantage of the Federal Adoption Tax Credit and Income Exclusion

There are two major adoption tax benefits: tax credits for adoption-related expenses and income exclusion for employer-provided adoption assistance.

In 2019, the maximum tax credit for eligible expenses was $14,080 per adoption. You can use the credit toward expenses like agency and attorney fees and travel expenses.

You can subtract the adoption credit from your tax liability for the year and carry it for up to five years if the credit is greater than your liability.

Always consult an accountant or the IRS for complete and accurate information.

2. Check With Your Employee Benefits Programs

Few employers advertise adoption benefits. Don’t hesitate to dig a little deeper to see what might be available.

Some companies offer financial reimbursements for adoption fees and even paid leave on top of your vacation package to help cover travel time and/or parental leave.

3.  Choose an Agency With Sliding Fee Scales

adopting a child
Michele Fried and her Husband Chuck Fried, far left, pose with their 10 children. Photo courtesy Michele Fried

Some agencies require a flat fee for all applicants, while others structure their fees based on your personal finances.

You might save money by working with an agency that offers a sliding fee scale based on your gross worth. This fee structure helps many save money and also enables more people to become adoptive parents, regardless of their income.

4. Look Into State Subsidies for Adopting a Child

Many states grant subsidies to families who adopt children born in the United States with special needs or who resided in foster care for a specified period of time.

If you’re seeking a subsidy, the application needs to show that the child’s case is medically compelling. It should document the child’s disability and outline the hardships they’ll have growing up.

Within each state, counties may vary in their subsidy requirements and contributions. The North American Council on Adoptable Children summarizes each state’s adoption subsidy requirements for your reference.

5. Weigh the Pros and Cons of Fundraising

Fundraising draws much-needed awareness to the topic of adoption and, obviously, assists with your budget. 

In some cases, religious organizations, like churches and synagogues, may jump at the opportunity to assist you with this effort. They may be willing to host bake sales, bingo nights, carnivals and pass-the-hat events to help you raise money.

Keep in mind, though, fundraisers often are not the most ideal option for adopting a child. They may generate uncomfortable questions and comments from your friends, family and community.

Some might make judgments about your financial situation. Others might question whether all funds raised will go toward adoption expenses or into your pocket. 

If you fundraise, understand the downsides. They certainly may not be within your comfort zone.

6. Explore Grant Programs for Adopting a Child

A number of national organizations offer grant programs to prospective adoptive parents. Consider exploring the following:

7. Take Out Loans

A number of adoption-related loans are available, including:

You can also explore a mortgage and home-equity loan. You can write off the interest on your annual tax return.

8. Accept Gifts From Relatives

A gay couple read to their two daughters at bedtime.
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You might be surprised to learn how many adoptive parents receive financial gifts or interest-free loans from their loved ones, including grandparents, aunts, uncles and even siblings.

My uncle gave us a $5,000 loan, and my grandmother co-signed for another loan for our first adoption.

Relatives are often a great resource for support throughout the adoption journey.

9. Explore Your Assets

You may have inheritances or trusts in your name, or you may be able to borrow against your life insurance policy.

Also, don’t forget your 401(k). While it may sound outrageous to pull from your 401(k) to subsidize an adoption, keep in mind that it requires no application fee. 

You can pay back a 401(k) loan with paycheck deductions for up to five years, and you’ll have no credit score stress at all. 

That said, some warn against borrowing from your 401(k), because it defeats the purpose of a secure retirement fund entirely. Also, there’s a default risk when you borrow from your 401(k). You could end up owing taxes and paying more in the long run.

10.  Choose an Agency Without a Placement Fee Deposit

Some agencies require you to make a deposit on your placement fee, even when a child hasn’t been placed with you yet. 

This can be financially burdensome if your finances are tight and you don’t have the money to pay upfront for services you haven’t yet received.

Consider adoption agencies that only require these fees upon placement of your child.

Don’t Let the Cost of Adopting a Child Deter You

Adoption isn’t for everyone. But if you’re curious about adopting, don’t immediately rule it out once you hear murmurings about the expense.

Talk to an adoption professional about your options. Do your own research. Reach out to adoptive parents to discuss their experiences.

Despite the challenges, fees should never be a barrier to adopting your child and creating your forever family.  

Michele Fried is the founder and CEO of Adoption STAR, a COA Hague accredited nonprofit adoption agency licensed in New York, Florida and Ohio that is dedicated to creating forever families.