Financial Challenges of Adoption & How the Church Can Respond

Kathy McKinney, Jason Kovacs, Andy Lehman

Biblical Perspective I. God’s Pull

Romans 8:15-17: “For you did not receive the spirit of slavery to fall back into fear, but you have received the Spirit of adoption as sons, by whom we cry, “Abba! Father!” The Spirit himself bears witness with our spirit that we are children of God, and if children, then heirs—heirs of

God and fellow heirs with Christ.” II. God’s Promises

2 Corinthians 9:8: “God will generously provide all you need.” Philippians 4:19: “This same God who takes care of me will supply all

your needs from his glorious riches, which have been given to us in Christ Jesus.” 

Matthew 7:11: Jesus said, “If you sinful people know how to give good gifts to your children, how much more will your heavenly Father give good gifts to those who ask him”

III. God’s Provision Romans 8:32 “He who did not spare his own Son but gave him up for

us all, how will he not also with him graciously give us all things?”

Financial Need & Resources

Often the greatest challenge – cost of adoption Adoption ‘ransom’

“…Son of Man gave His life a ransom for many” Matt 20:28

Overview of the Costs of Adoption How much will it cost? State Foster Care Domestic Adoption – $8-25k

International Adoption - $20-$35k +

All tools, ideas & organizations are just instruments in God’s hands…

God is “Jehovah-Jireh”!

Direct Grants Directly awarded to family for adoption expenses

Given without repayment or fundraising

Mirrors grace freely given to us

Grants range from $2,000-$10,000+

Disbursed directly to adoption agency

Based on financial need

Adoption Matching Grants Matching Grants of up to $4,000/per child ($1-for-$1 match)

Kingdom activity: see adoption as “missions in reverse”…bringing the mission field home. (involves family, church, community)

Families given “turn-key” support raising kit Biblical act of making needs known (letter, Facebook, blog) Others donate tax-deductible gifts e.g. Harlow family - $2500 Matching Grant – raised over $11K 100% of donations to adoption expenses (no admin fee deducted) Church, family friends become engaged financially & prayerfully

Average Scenario: Matching Grant of $2,500 - mobilizes an additional $5,000 - average total grant funds for your adoption = $7500

Federal Adoption Tax Credit Currently there is a federal adoption tax credit

of up to $13,170 per child (for 2010-11) for unreimbursed “qualified adoption expenses.”

See IRS Tax Topic 607: Adoption Credit (www.irs.gov/taxtopics/tc607.html), which provides general information about the current federal adoption tax credit.

Note: Please be sure to consult your tax adviser for additional information and to understand how the federal adoption tax credit works and may impact you.

Interest-Free Loan Reduces initial, upfront ‘cash-flow crunch’

Maximizes stewardship by allowing family to capture $13k Federal Adoption Tax Credit

Couples sign a covenant agreement to repay Monthly or Annually (can use Fed Adoption Tax Credit to repay loan)

The $13k is repaid & then circulated through the next family

Funds can become self-perpetuating, where loan repayments each month/year can help fund NEW families

Tried & True fundraising ideas…

Other Tools & Ideas, cont’d

Tax Credits Federal (as mentioned previously) State

Employer Adoption Assistance A number of companies have adoption assistance

programs built into their benefits with some providing between $2,000--$10,000

The military provides $2,000 www.adoptionfriendlyworkplace.org

How does “Adoption Fund” fit with church mission/vision? Evangelize the lost

Adoption is evangelism at its core...

Edify the saved Put faith in action; develop relationships/support

Minister to those in need Millions of orphans trapped b/c of financial barrier

Be a Conscience in the community As Church is involved, the community will see Jesus is alive and

working in His people (Matt 5:16)

3 Options - in Creating an Adoption Fund

1. Church CREATES own 501c3 (non-profit organization)

2. Church MANAGES own funds, donations, distributions, screening, qualifying, etc.

3. Church PARTNERS with an organization who will administer/facilitate the fund on behalf of the Church

Option #1: Creating own 501(c)3 organization / the BENEFITS

Building from ground up gives total ownership in vision, opportunity & rewards

Empowers lay people to get involved / but staff doesn’t administer

Spins off an entity that can grow nearly unlimited ways Gives church financial separation between Fund &

money Freedom to grow; not dependent/drain on church Allows the 501c3 responsibility to follow tax laws

Option #1 - Creating own 501(c)3 organization / the PROCESS

Option #2 – Manage Fund in-house / the BENEFITS

Gives the church complete ownership Gets church clergy, staff, and decision makers involved Church an use the benevolence fund to avoid 501c3 Funds can be from inside or outside church budget Funds are maintained as part of the church budget Step-by-step instructions & case studies available Church is not dependent on third party

Option #2 – Manage Fund in-house / the PROCESS Build your team / Choose the right model Create your grant & loan guidelines

What types of adoptions will we fund? Who is eligible? What percentage of the total adoption expenses will this grant supply Who on the team will make the grant decisions?

Managing Accounting, donation receipting, verifying qualified expenses, funds

disbursement, IRS guidelines, etc.

Example/Sample: Step-by-Step Guide to start in-house fund: www.showhope.org/fund Lake Pointe Church – www.lpcadoption.org

Option # 3 – Church uses PARTNER to facilitate/ BENEFITS Partner can manage/facilitate the Fund & carry administrative

load on behalf of church All screening, reviewing, approving/denying as partner of the church (agreed

criteria) All accounting, receipting, disbursement of funds to approved

agencies/expenses

Flexible – church can be as involved as desired Quick – funds can be set up in 1-2 days Branding – Church Fund is “branded” as Church desires Reports – monthly financial reports given to Church (balance,

disbursements, etc.) No Cost – no administrative fee / 100% of donations to Fund

Option # 3 – Church uses PARTNER to facilitate/ PROCESS Church & Partner have initial conference call to set up Fund (Q &A)

Church shares criteria/preferences for making decisions

Members of Church apply to Church Fund on church-branded application Applications come to Partner, who processes application as Church

desires Grant/Loan decision make in conjunction w/ Church Partner handles all disbursements & expenses

ABBA - www.abbafund.org/churchadoptionfunds.htm Lifesong - www.lifesongfororphans.org/adoptFund.html

Iriving Bible Church (Tapestry) - www.tapestry.irvingbible.org

Community Adoption Funds (i.e. Louisville vicinity)

“Both Hands” Adoption Funding One for the WIDOW & One for the ORPHAN

Innovative tool to remove financial barrier A team fixes up a widow’s home Renovation provided for free to widow (donated labor & construction

materials) Sponsorship donations help fund adoption expenses

How does this help fund adoptions? 100% of donated sponsorships are used for adoption expenses Disbursed as Adoption Grant

http://vimeo.com/6483710www.bothhandsfoundation.org

Hope for 100 Challenge and Support families so 100

children can be adopted

Adoption Fund exists as one component to financially help those same 100 adoptions

www.hopefor100.org

Real life example – Scott & Jennifer Adopting 1 yr old, cleft lip, India (already had 2

children in family)

Adoption Cost: $31,350 $3,300 - from savings $10,000 – adoption loan $2,500 – adoption matching grant $12,906 - donated, result of matching grant $3,000 – direct grant from organization $2,000 – unexpected property tax refund $300 - garage sale proceeds that friend held

Real life example – Tim & Susan Adopted 2 yr old, China (already had 5 children in family)

Adoption Cost: $25,050 $2,000 gift from their church $2,000 savings $2,000 sold personal items $3,000 matching grant $9,716 donated, result of matching grant $1,000 result of giver after reading newsarticle $2,000 (2) anonymous givers $1,000 each $3,500 sister donated FF miles to pay for flights/airfare

Some Grant/Loan Organizations… abbafund.org achildwaits.org cadmanfoundation.org carolinespromise4u.org ggam.org hadassahshope.org katelynsfund.org lifesongfororphans.org lydiafund.org micahfund.org nafadopt.org ourcreatorshope.com showhope.org

Q & A Kathy McKinney, Show Hope

kathy@showhope.org 615-550-5600, 102 Direct Grants, Church Fund guides

Jason Kovacs, ABBA Fund jason@abbafund.org / 704-920-9146

Covenant Loans, Administer Church Funds

Andy Lehman, Lifesong for Orphans andy@lifesongfororphans.org / 309-747-4515

Covenant Loans, Matching Grants, Administer Church Funds