How to Finance Your Adoption

March 1, 2021

As you’ve likely discovered by now, adoption can be very expensive. In fact, high costs are the number one reason that people choose not to pursue adoption.* But thankfully, there are plenty of options to consider that can help you finance your adoption.

Many organizations, nonprofits, and even the United States government have stepped in to offer some financial assistance. The primary ways adoptive parents finance their adoptions are through a combination of the Adoption Tax Credit, adoption grants, loans, budgeting & savings, and fundraising.

Let’s explore each of these opportunities in more detail.

The Adoption Tax Credit

The Federal Adoption Tax Credit (ATC) was established permanently in 2013 to offer financial relief to adoptive parents. It’s important to briefly note two things about the ATC:

  1. The ATC is processed as a tax refund, not a tax deduction.
  2. The ATC is non-refundable, which means that only adoptive parents with tax liability will benefit (in other words, you have to owe taxes to be eligible.)

We list the ATC first because no matter your adoption situation, it’s worth looking into this tax credit. As of 2020, you could receive up to a $14,300 tax credit per adopted child! Taxes can be confusing, so don’t be afraid to get a tax professional involved or ask your adoption agency for more information.

Lastly, don’t miss out on state-level adoption tax credits! These are a rarely-discussed benefit that’s potentially available to adoptive parents based on their state of residence and adoption situation. Check out this list from American Adoptions to see if your state offers an adoption tax credit. Also, make sure to ask your adoption agency if any state-level tax credits are available in your state, as there could be newly established tax codes in your area.

Adoption Grants

Adoption grants are one of the best resources available to adoptive parents. Virtually all adoption agencies will recommend that their families apply for at least one, if not multiple grants available for their adoption. Each granting organization has their own qualifying process for applicants, so it’s best to do some research that’s specific to your family.

Here’s a few of our favorite adoption granting organizations to help jumpstart your search!

There are also plenty of adoption granting organizations that are state-specific, so we recommend doing a little research on organizations within your state.

Adoption Loans

Adoption loans are exactly what they sound like: loans to cover upfront adoption costs that the adoptive family will pay back over time. It’s important to understand this key difference between adoption grants and loans: While grants are effectively a gift that the adoptive family does not pay back, a loan requires the adoptive family to pay it back, often with interest.

Loans are not always a preferred option for financing your adoption, but it can be a necessary resource for adoptive families in specific situations. Services like SoFi, USAA for active military or veterans, or the faith-based Abba Fund loan program are a few options for families in need of loans for their adoption costs.

Disclaimer: Both Hands Foundation does not formally endorse the use of loans for adoption, and is not responsible for any information contained within the websites linked on this webpage.

Budgeting & Savings

We know you might be thinking, “Okay isn’t this one a little obvious?” But adoptive parents will tell you, it’s easy to get lost in the world of fundraising or applying for grants and forget to consider the various ways you could be saving.

We recommend setting aside time to review your budget, and look for areas where you can pull some funds into a saving “bucket” for future adoption costs. Remember, it all adds up! You might think that trimming $100 off your monthly restaurant spending won’t make a big difference, but adoption financing is all about adding up those small savings.

Budgeting and savings likely won’t cover the cost of adoption alone, which is why every family we work with uses a combination of savings and other financing methods. Which leads us to our favorite financing method…


We saved the best for last. At Both Hands, we believe fundraising is much more than asking for money.

Fundraising is an invitation for others to join you on your adoption journey. Many people would love to help bring a vulnerable child into their forever family, and through fundraising for your adoption, you get to create that opportunity.

We believe every adoptive family should consider fundraising. Not only does it invite others to join in your adoption journey, but also creates a community of supporters that will be there when your child comes home!

We’ve put together a list of some high-impact fundraising ideas that can make a big difference in your adoption journey! We hope you also consider applying to do a Both Hands project, where families raise an average of $15,000** for their adoption costs through serving a widow in their community. Learn how it works by clicking below!

* ”Why Americans are (or aren’t) considering adoption” published by YouGov.

**Based on the average amount raised per project among all adoption fund and orphan care projects in 2020.

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