Thrifty Thinking: Raising Money for Adoption

One of primary barriers to adopting a child is cost. The cost for adopting a child can range from $30k- $40k. Saving for adoption can be daunting and Nicole Witt, The Executive Director of The Adoption Consultancy and TODAY Parent Contributor, gets it. That’s why for Spring Savings she wants to share with you her top 10 tips for saving for an adoption. These include:

• Get a temporary and/or part-time second job and put all the money into your adoption fund
• Hold a garage sale or sell your extra household ‘stuff’ on eBay
• Hold other fundraisers such as a car wash, bake sale, or spaghetti dinner
• Raffle off a high-value item or some personal services that you can provide
• Ask for help from family, friends and church
• Temporarily rent out an extra room in your home
• Eliminate unnecessary expenses (cable TV, home phone, dinner out)
• Clip coupons; shop sales and second-hand stores
• Create a website to solicit donations
• Convert hotel points, airline miles, and other loyalty program points into cash

I had a chance to interview her to learn more.

Why might parents need to raise money for an adoption? 

Adoption can be extremely expensive. Private domestic adoption usually costs at least $30,000 and can sometimes be more than $50,000 once all costs (such as travel, etc.) are included. Given that most families don’t have this kind of extra money at-hand, adoption fundraising has become more and more commonplace.

Are there other sources of funding for adoption? 

·         Yes, there is a federal tax credit of up to $14,300 for families that qualify (the benefit starts phasing out for households with adjusted gross income of $214,520 and fully phases out by an adjusted gross income of $254,520.) This is a dollar for dollar tax credit, so it’s much more valuable than a tax deduction.

·         Some states also offer adoption tax credits.

·         Some employers offer adoption reimbursement. This can range from $500 to more than $20,000.

• The 2019 SECURE Act allows for a $5000 penalty-free withdrawal (not loan) from one’s 401(k) account to defray adoption costs. If a couple has separate retirement accounts, they can each take $5000.

·         Many families access loans, grants, and/or lines of credit.

How can parents get over the discomfort of asking for help? 

Although it can be awkward to ask our friends & family for financial assistance, most of our loved ones really do want to help. Potential adoptive parents are usually pleasantly surprised to discover how thrilled their loved ones are to be part of the process. Also, you don’t need to ask them for money per se. You can ask with help in organizing a fundraiser, to donate unused items to your garage sale or for a recommendation for a part-time job.