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How to Afford Adoption – 11 Ways to Come Up With the Finances to Adopt

The decision to expand your family is rarely a financial one. Raising kids is unquestionably expensive — costing almost $16,000 per year for the average middle-income family, according to 2015 USDA statistics adjusted for inflation.

When you opt for adoption, the expenses are even more formidable. Although public adoption costs relatively little, those who have their hearts set on adopting an infant through domestic or international adoption could face expenses upward of $50,000. The cost of adoption can feel like an insurmountable obstacle for many families.

On the other hand, adding to your family through adoption can enrich your life in wonderful and powerful ways. My parents chose to adopt my youngest brother from the foster care system after having three biological children of their own.My oldest and dearest friend, who was unable to conceive children, adopted both of her kids as babies through private, domestic adoption. And none of us could imagine our lives without them.

Ultimately, the decision to expand your family is one of the heart, not the wallet. But regardless of which type of adoption you choose, at some point, you’ll be faced with the question of how to afford it.

Fortunately, there are a variety of options to help parents afford to expand their families through adoption.

How to Afford Adoption

A home study, a necessary first step to adopting a child, includes a financial check to ensure adoptive parents are financially sound before taking on the care of a child. But that doesn’t mean most financially stable families have a spare $50,000 lying around.

Whatever adoption route you take, there are financial resources available. They include ways to help you afford the significantly more expensive domestic and international infant adoptions. There are also resources for adoption through foster care, especially if you take on a child with special needs. So don’t let the potential cost stop you from creating the family you’re longing for.

Below is a list of potential resources and options for funding your adoption. Which ones are right for you will depend on your family’s unique situation. Some adoptive parents use only one resource, and some use a combination of several to help make their adoption dreams a reality.

1. Shop Around for the Right Adoption Agency

One of the primary ways to keep the costs of adoption as reasonable as possible is to work with the right adoption agency. Adoption agencies structure fees and handle refunds in a wide variety of ways.

It’s important to find an agency that will help you stay within your budget. But don’t automatically go with the agency that quotes you the lowest amount. In order to gain your business, some agencies quote a low amount, then raise the total cost over time with a number of variable fees.

When you’re searching for an agency, make sure to ask what specifically is included in their quote. For example, does the quote include birth mother expenses, legal fees, agency fees, and advertising fees? Ask if it’s possible there will be additional fees down the line.

Be sure to seek out adoption agencies that are completely honest and transparent about all of the potential fees involved. If the agency seems to be hiding something, they probably aren’t the right agency to work with.

2. Look for an Agency With Fixed Fees or a Sliding Fee Scale

One way to help mitigate costs is to look for an agency with fixed fees. A fixed fee means that no matter how many hours are required to complete the adoption process, the total agency fee will not increase. Some agencies increase fees as the adoption process goes on, which can significantly raise your total costs.

Other agencies offer a sliding fee scale based on income. This fee structure can greatly help those who would otherwise be unable to adopt.

3. Build Your Savings

Every expecting parent should make a concerted effort to build up their savings. We all know kids are expensive, adopted or otherwise, and building savings is one of the top financial moves to make when starting a family. But one advantage adoptive parents have over biological ones is that adoption often takes a long time. You may be waiting for your child anywhere from one to three years, on average. That gives you time to maximize your savings rate and put away as much as possible. If you don’t currently have a savings account, or yours has an interest rate of less than 1%, open a high yield savings account at a bank like

Typically, adoption agencies require you to pay only some of their fees upfront — the rest are due on placement. While you’re waiting on your match, it’s a good time to focus on saving as much money as you can to pay the remaining fees and prepare for the cost of raising a child. While it’s you may be one of those families who is matched almost immediately, it’s a good idea to make the most of whatever time you have.

4. Take Advantage of the Adoption Tax Credit

Whether you’re adopting domestically or internationally, all adoptive families are entitled to the Adoption Tax Credit. Congress votes on the amount of the credit every year, but it typically increases slightly each year to account for inflation and increased living expenses.

The credit applies to any qualified out-of-pocket adoption expenses up to a maximum of $14,080 per child. Qualified expenses are any that are necessary for the adoption, including attorney and court fees, medical and travel expenses, and agency fees.

It’s important to note that this is a credit, not a deduction. A deduction reduces your amount of taxable income. A credit reduces the amount of your tax liability. That means it reduces whatever you end up owing in taxes based on your adjusted gross income.

The Adoption Tax Credit is a nonrefundable credit, which means you won’t get back any money above and beyond what you owe in taxes. For example, say you end up owing $12,000 in taxes one year, but you had more than $14,080 in adoption expenses. You’ll only get back the $12,000 and not the full $14,080.

It’s also worth noting the credit can be carried over for five years. That means if you don’t use all of it in the first year you claim it, you can use the remainder to continue to reduce your tax liability for up to five years.

You can’t take the credit for international or foster care adoptions until the adoption is finalized, which could take six months or more depending on your state’s laws. But you can take the credit for expenses for domestic adoptions that are not yet final the year after the expenses are paid. That means even if you experience a disrupted adoption — one in which the birth mother changes her mind — you can still benefit from the tax credit. Once a domestic adoption is final, expenses can be credited that same year.

In addition, if you adopt a child with special needs through foster care, you may be able to take the full credit, regardless of whether your expenses met that amount. Each state has different requirements for what constitutes “special needs.” The state in which the adoption took place must make a declaration of special needs, which must accompany your tax return.

As taxes can be particularly complex, be sure to always consult an accountant or the IRS for the most complete and accurate information.

5. Look Into Any Employer Benefits

Depending on your workplace, your employer may offer one or more adoption benefits. These can include paid parental leave as well as information resources and financial assistance.

Tax Exclusion Benefit

One form of financial assistance is a tax exclusion. Rather than paying an amount of money directly to you, your employer may allow a portion of your income to be tax-exempt. The amount is usually equal to a certain amount of expenses paid out-of-pocket toward your adoption.

If your employer offers a tax exclusion benefit, you can use it in conjunction with the federal Adoption Tax Credit, but you can’t apply both toward the same expenses.

Employer Adoption Credit

Another form of financial assistance is an employer adoption credit. According to the Child Welfare Information Gateway, some employers provide a lump-sum payment for an adoption, usually between $1,000 and $15,000. Others pay certain expenses related to adoption up to an established ceiling.

This assistance may be tax-exempt, depending on whether your employer has a qualified adoption assistance program as defined by the IRS. Parents can receive up to $13,400 in reimbursements from their workplace without paying taxes on those benefits.

You can’t apply the Adoption Tax Credit toward expenses your employer reimburses. But if you work for an employer that does offer benefits, this can be an important way to get as much of your adoption expenses covered as possible.

To find out if your company has adoption benefits and qualifies for any tax exclusions, speak to your HR department.

6. Consider Switching Jobs

If you don’t currently work in an adoption friendly workplace, consider switching jobs. It might seem like an extreme move, but the benefits — from paid time off to adoption credits — could be worth it.

To find an adoption-friendly workplace, search the list compiled by the Dave Thomas Foundation, which is updated annually.

If you decide switching jobs is right for you, make sure to check with your new HR department on how long you must be an employee before you’re able to access benefits. Sometimes, you need to work for a company for at least a year to qualify for paid leave. And although you could be waiting as long as three years for your adoptive child, matches are sometimes made almost immediately with birth mothers who have just delivered.

7. Apply for an Adoption Grant

A number of nonprofits and charitable organizations offer adoption grants to prospective parents. Unlike loans, grants don’t have to be repaid. You can’t default on a grant, and you don’t have to put up any collateral against it.

There are several important things to keep in mind about adoption grants. First, every organization has its own eligibility criteria. For example, many adoption grants are religion-based and require a minister or priest to vouch for you.

Second, adoption grants come from nonprofit organizations that are limited by their budgets. No matter how much an organization might wish it could give grant money to every family that applies, it may only be able to fund a scant few.

Finally, even if you’re awarded money, it could take a significant amount of time to receive it. Granting organizations often have hundreds, if not thousands, of applications to wade through, and the process for finding candidates to award grants can be extensive.

Given these drawbacks, if you’d like to try applying for an adoption grant, be sure to apply for more than one to increase your odds of being accepted. Here are a few of the more prominent grants. A Google search can uncover hundreds more, especially if you search by geographic location.

  • National Adoption Foundation. Awards grants from $500 to $2000. You can use the money to help with any kind of adoption.
  • Gift of Adoption Fund. Awards grants from $1,000 to $7,500. You can use the grant funds for domestic or international adoptions, but the organization prioritizes adoptions that keep siblings from being separated, special-needs children from being institutionalized, and for children who are about to “age out” of the foster care system.
  • A Child Waits:.Awards grants in various amounts up to $5,000 to U.S. citizens in the process of adopting internationally. Funds are paid directly to the service providers for qualifying expenses.
  • Help Us Adopt. Awards grants in varying amounts up to $15,000. You can use the funds for any kind of adoption. Funds are paid directly to the adoption agency.
  • The Buescher Foundation. Awards grants in varying amounts to assist with the costs of domestic adoption. Prospective parents must be working with an approved agency or facilitator.

8. Take Out a Loan

One of the most common methods of adoption funding is loans, either adoption-specific loans or personal loans. Although taking out a loan may not always be the soundest financial decision, only you can decide whether taking on debt to grow your family is worth it to you.

Unlike grants, banks can often put loan funds in your hands the next day. It can be helpful when you have to pay your agency fees now but are waiting on something like the Adoption Tax Credit to help with costs.

While it’s not always ideal to borrow money for any purpose, most of us take on debt to buy houses and cars, so why not to grow our families? Just keep in mind that a loan must be paid back with interest. Be as clear as possible about what the terms are, what the monthly payments will be, how long it will take to repay the loan, and whether you can manage the payments in your monthly budget along with the cost of raising a child.

That said, here are some of the more popular ways to borrow for adoption costs.

Adoption-Specific Loans

There are a number of adoption-specific loans available. They’re provided by organizations that specialize in loaning money specifically for the purposes of adoption. Here are just a few:

  • A Child Waits. Provides loans of up to $10,000 specifically for international adoptions.
  • Pathways for Little Feet. A faith-based organization that offers interest-free loans up to $7,500 to Christian families.
  • LightStream. A division of SunTrust Bank that offers low-interest loans for adoption. The lowest interest rates are offered for the shortest terms, so if you can pay back your loan quickly, you’ll save the most money.

You may also be able to apply for adoption-specific financing through your adoption agency. Many agencies, similar to doctor’s offices, work with specialized financial providers.

Personal Loans

The money you receive from a bank through a personal loan can be used for any purpose, including financing an adoption. You can apply for a personal loan at almost any bank, but here are a few to start with.

  • USAA. A credit union for military service members and their families, USAA offers personal loans with “instant” decisions in many cases and funds available as quickly as the day after approval. Check out our USAA review.
  • SoFi. A popular loan provider that offers fixed interest rates and a user-friendly experience. If you qualify, a SoFi loan could potentially cover adoption costs up to $100,000. Check out our SoFi review.
  • Upstart. A loan provider that considers more than your credit score when making lending decisions. They also look at your education, income potential, and work history, which could be helpful if these are solid but your score isn’t the best.

Home Equity Loans or Home Equity Lines of Credit

If you own your own home, a home equity loan or a home equity line of credit through can be one of the least expensive ways to borrow, as their interest rates are often lower than most personal loans’.

The biggest drawback is that this type of loan requires you to use your home as collateral. If you become unable to make your payments, you could end up with a child but no home to raise them in. Make sure you can manage the payments after also accounting for monthly child-raising costs.

401(k) Loans

While pulling money from your 401(k) is almost always considered a “don’t,” it does come with a few perks. There’s no application fee, no credit check, and you can pay back the loan with paycheck deductions for up to five years. Plus, you may be able to pay it back even faster after using the Adoption Tax Credit and getting your refund.

Keep in mind, though, that if you borrow to fund your entire adoption, which could cost $50,000 or more, it will have a significant negative impact on your retirement savings. Retirement funds require the benefit of time to grow. The longer you take to pay back the loan, the less time you’ll have for compound interest to work. Further, you could end up owing taxes on the withdrawal, ultimately negating the benefit of the Adoption Tax Credit. Reviewing your options with a certified retirement professional is likely your best bet.

Credit Cards

Many prospective adoptive parents turn to credit cards to help finance their adoptions. However,  with typical interest rates of 20% or higher, credit cards can be one of the most expensive ways to borrow money if you’re not able to pay them off every month.

High interest rates can quickly turn credit card debt into a crippling situation. So only turn to this method after exhausting all other possibilities, and be sure to pay credit card debt off as quickly as possible.

9. Make Use of Federal and State Subsidies for Special-Needs Adoptions

The Federal Title IV-E program provides assistance to families who adopt children with special needs or who have been within the foster care system for a specified period of time. Assistance can take the form of a one-time payment, ongoing financial assistance, or medical coverage through Medicaid.

Although adopting from the foster care system costs very little, raising a child with special needs can be an enormous expense. Subsidies greatly help adoptive parents interested in helping special-needs children.

For those who don’t qualify for Federal Title IV-E adoption assistance, states also offer their own subsidies. Laws vary from state to state and can even vary from county to county. For a summary of each state’s special-needs subsidy requirements, visit the North American Council on Adoptable Children’s website.

10. Fundraise

Fundraising is an option that comes with its share of supporters and detractors. On the one hand, fundraising can bring much-needed awareness to the topic of adoption, and people are often happy to help make a family’s dreams of adopting come true.

On the other hand, fundraising requires you to go public about your story, which raises the possibility for uncomfortable questions and comments from your family, friends, and community. Some of these might include judgment about your financial situation and whether you should be adopting at all if you can’t afford to pay for it on your own.

By and large, however, most people who have attempted fundraising for adoption have found that friends, acquaintances, and strangers are happy to help. While it may not be for the faint of heart, adoption fundraising is an opportunity to get your whole community involved in your adoption journey.


Adoption fundraising can take all kinds of forms — everything from bake sales to 5Ks to crowdfunding. In fact, one crowdfunding site, AdoptTogether, exists for the sole purpose of adoption fundraising.

While raising money through crowdfunding can be tricky, if you have a compelling story and the time and resources to tell it, you may be successful with this method of fundraising. In addition to AdoptTogether, another great source for starting a crowdfunding campaign is GoFundMe.

Fundraising Sales

You can also fundraise by hosting any kind of sale, from lemonade stands to craft fairs to garage sales. My friend raised $1,500 toward the adoption of her daughter with her garage sale fundraiser.

You can also work with an organization that specifically creates products for the purpose of fundraising. For example, you can raise funds by selling fair trade coffee with Just Love Coffee; host a jewelry party with Noonday Collection, which designates a portion of profits toward supporting adoptions; or sell T-shirts with Bonfire.

11. Decide on Your Budget and Upper Limit

Of course, you always have the option to decide not to go through with a particular adoption if the cost is simply too much for your budget to handle. It’s helpful to be prepared for this as a possibility.

Setting a budget with the adoption agency will help them match you with the opportunity that most suits your needs. But occasionally, the unforeseen happens, such as a sudden medical issue with the birth mother’s pregnancy that requires extra money. If this happens, you’ll need to decide with your spouse if you’re willing to go over budget and where your absolute line is.

Because emotions can run high when it comes to adding to your family, it’s best to decide on your budget before beginning the process and to have a plan in place for dealing with a potential budget-busting adoption. One option is to make a list of all the reasons you can’t go over budget, such as how it will affect your ability to provide for your future child. Then pull out the list if you’re ever faced with an overbudget adoption to remind yourselves why it’s so important to look past your emotions.

Unlike with fertility treatments, which may never result in a baby, as long as you’re willing to wait to adopt, you will eventually find the right match for your family.

Final Word

If you’re serious about expanding your family through adoption, don’t let the obstacle of cost keep you from realizing your dreams. Consider talking to an adoption professional and exploring your options or speaking with other adoptive families about their stories before completely ruling it out due to cost.

Although money is unquestionably necessary for many things, its value ultimately lies in being a tool for achieving your best life. And if that includes one or more adoptive children for you, despite the challenges, it’s worth taking the time to determine how you might overcome the financial barrier and create your forever family.

Are you considering adopting? Which of these funding ideas look promising to you?

Sarah Graves, Ph.D. is a freelance writer specializing in personal finance, parenting, education, and creative entrepreneurship. She's also a college instructor of English and humanities. When not busy writing or teaching her students the proper use of a semicolon, you can find her hanging out with her awesome husband and adorable son watching way too many superhero movies.

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