All About The Money

Which agency is the Cheapest?

By now your eyes are glazing over and somewhere out there someone is thinking “Look, I don’t care about all of that–how do I find out which agency is the cheapest?!”  That is a surprisingly difficult question to answer.  I reviewed cost sheets for several popular agencies to try and answer that question.  You start with the application fee which can range from $200 to $700.  All agencies will have the same fixed costs for the adoption such as the fees you pay to immigration and to China.  But then there is an “agency fee” which should cover all of what you pay to the agency that isn’t a fixed cost from somewhere else.  However, the agencies all calculate these fees differently on their cost sheet.  Some favor one large “inclusive” agency fee while others have an agency fee which seems low but they nickel and dime you with various other fees.  And an itemized cost sheet may or may not be available on the website, just to make it a little bit more difficult to compare costs.

Let’s look at two different agency fees using information I pulled from two actual agency sites:

Agency A has an agency fee of $15,000.  Agency B has an agency fee of $5500.  Sounds like an easy choice, right?  But Agency B has the following additional fees:OLYMPUS DIGITAL CAMERA

  • Translation and document fee $600
  • Dossier registration fee $800
  • Dossier translation fee $350
  • Professional service fee $1500
  • Orphanage donation $5300
  • Fees to US Consulate for services $1000
  • —————-Total extra fees = $9550

All of those extra fees for Agency B are included in the agency fee of Agency A.  So if you subtract those out, then you are actually comparing an agency fee of $5450 for Agency A to the agency fee of $5500 for Agency B making them essentially the same cost.  This is why it is so difficult to compare agency costs!

Let me give you another example: orphanage partnerships.  I discussed orphanage partnerships previously, and because they involve an agency supporting an orphanage financially, partnerships raise an agency’s operating costs.  Agencies can spread this cost around in different ways.  Let me use the same two actual agencies above, and add Agency C.

  • Agency A has 10 partnerships and includes any partnership costs in their comprehensive “agency fee.”
  • Agency B has 12 partnerships and has a “charitable aid and development fee” of $500 which is probably used, in part, to support their partnerships.
  • Agency C has 12 partnerships and charges a $600 fee specifically to people who adopt from a partnership orphanage, but also an additional $250 fee for everyone which goes to support their charitable development work.

An important aspect that few people consider when comparing fees between agencies are the homestudy and post-placement costs.

Sometimes your placing agency will also be your homestudy agency and in that case, you can’t do much about the cost of the homestudy.  If you are in that situation be sure you ask if you would be able to keep your homestudy if you transfer to another agency later in the process. Most people will use a local homestudy agency and that agency will send the homestudy to the placing agency for approval.  The placing agency might tell you that you need to use a particular homestudy agency that they are affiliated with or you might be able to choose any Hague accredited agency.  My placing agency estimated the homestudy cost at between $2500 and $3500 but my local homestudy agency only charged $1500, so it pays to shop around if you have that option.

China currently requires that you submit post-placement reports for five years following an adoption.  Unfortunately, many parents are less motivated to complete this paperwork once their child is home.  When an agency consistently has parents which do not submit post-placement reports, then it reflects poorly on that agency and can affect their working relationship with China.  For this reason, many placing agencies are now requiring a security deposit from parents at some point before the adoption is finalized.  Many homestudy agencies are also either requiring a deposit or that all the post-placement costs be paid upfront rather than the old way of paying per visit as you go.  I spoke with one parent who paid $6000 in post-placement visits before they were allowed to travel.  If you are comparing two agencies and they are $2000-$3000 apart in costs, be sure to ask about their post-placement polices because this can make a difference.

  • Does the agency require a deposit or that all the costs be paid upfront?
  • If it is a deposit, what will happen to the money if you move or the agency closes? I can’t stress this point enough because many parents have lost their deposit money for these two reasons.
  • Does the placing agency charge one post-placement fee or a fee per visit for translation and submission of the reports?
  • How much does the homestudy agency charge per post-placement visit?

Travel costs are also an area where agencies can make up additional funds to offset an attractively low agency fee.  I discuss this a bit more at the end of this post, and you can use the questions from the travel section in the previous post to help you in this area.

 

I think the conclusion I have drawn from my research on this topic is that it is almost impossible to determine which agency is The Cheapest.  There are too many variables to IMG_0549compare.  Most agency fees will vary within a range of about $5000.  If you narrow it down to two agencies and their costs are within $2000-$3000 then I would consider the factors in the last post carefully as you make your decision. Everyone needs to think about what they would pay more for, because as I pointed out last time, there is no perfect agency.

Let me give you some examples of how this works out in practice.  Unlike the agencies I listed above these are not actual agencies, just composites of typical experiences.

Big Agency is big but you didn’t realize how big until you waited three weeks for your dossier to be reviewed so it could be mailed to China.  Then you waited 9 months longer to get a referral than all of you friends on your DTC group who sent their dossiers at the same time.  But since you had been logged in so long you got your LOA in a week so you made up all kinds of time there!  Also, you split the difference on the travel group issue because your agency is so big that they send groups weekly so you got to travel 2 weeks after your travel approval arrived.  Your agency is one of the cheapest options even though they don’t offer grants, and you feel like you got great service, but part of you wonders if next time you shouldn’t pay a little more to go with an agency that will get you a referral sooner.

Small Agency is pretty small and you loved chatting on the phone with your agency rep.  It felt like you were part of a family and you still have the agency rep’s number on your cell phone.  Their fees were a little higher but they offered a lot of grants to their kids so that made it basically the same price as some of the cheaper ones.  You had to do most of the paperwork yourself, but the ladies from your DTC group were a huge help with that.  It was so exciting that your agency mailed your dossier to China the day after it arrived!  It was awesome to get a fast referral even if it seemed like that LOA would never arrive.  The only thing you didn’t like was that they require you to use a particular travel agency to handle all of the travel arrangements.  Yes, you got to leave five days after your TA arrived, but you feel that they really jacked up the price and you could have saved money by booking your own hotels and flights.  You also got really mad that they charged you a daily guide fee even on days when you didn’t use the guide!  And frankly, the guide wasn’t that great.  You were a little jealous of the great day trips and guide service that your friends with Big Agency had.  You hate to leave the agency family but you’re thinking that next time you might find an agency that won’t charge so much for travel.

Middle Agency is a mid-sized agency.  Their fees are a little higher but you felt you got a lot of perks for the money such as a dossier preparation service and they included a lot of those little fees in their price so you weren’t always being asked for money.  You were disappointed that they only send dossiers to China on a Friday but at least they reviewed it in 2 days so it went out the same week they received it!  You had to wait 3 or 4 months for a referral but it was so worth it once you saw her picture, and besides, you know lots of people on your DTC group with Big Agency that waited much longer.  You didn’t even mind the travel groups because your agency got great group rates on the hotel and guide service so it sounds like you paid less than the people who booked their own travel.  Unfortunately, your agency only sends a travel group to your child’s province once a month so you had to wait over a month after your TA to travel!!  Yes, you saved over $2000 on your airfare by waiting so long, but it seemed like everyone else left within a week of getting their TA.  You loved your agency, but you think that next time you might shop around a little to see if you can find one that is not quite so pricey and will let you travel sooner.

All three of these people had good experiences with their agency, would recommend them wholeheartedly to friends, yet had a major issue that they weren’t quite happy with.  Would you pay more to shave 6 months off your referral time?  To leave right away after TA?  That’s what you need to decide when choosing an agency.

Raising Funds For Adoption

IMG_1372It has become quite common for families to use fundraising to help with the high costs of adoption.  There are a few factors involved on this that I wanted to touch on in this post.  First, if you do not have all of the funds starting off, be sure to ask potential agencies for a payment schedule.  Some agencies require that you have at least half of the funds upfront.  Most agencies will have points where you cannot progress further if you are not paid up, often at either dossier submission (DTC) or travel.  Be sure to budget carefully knowing what you need to pay when.  My agency had us pay the orphanage donation at LOA, although you could make payments on it until travel.  Most other agencies don’t have you pay that until you travel, but many people were scrambling to come up with the orphanage donation funds plus travel costs all at the same time.  If you add in an agency that requires you to pay several thousand for post placement visits at the same time, that is a big chunk of money to come up with at one time and most of us don’t have a money ram to slaughter to pay for it.

Moving on to a sensitive topic, many families feel that they are called to adopt and an aspect of this for them is “stepping out in faith” even though they do not have all, or sometimes any, of the funds required.  In online adoption communities, faithful families will encourage each other with testimonies of how God provided all the funds necessary for their adoption even though it seemed impossible when they began.  I do not discount those stories, but I want people who are considering this route to know that not all families are able to come up with the funds in time, and these families are less likely to stay in the adoptive community to share their experience.  There is a constant flow of children on advocacy sites who were locked for a time and then return, weeks or months later, because the potential family could not find the funds to complete the adoption.  This hurts both the children, who will now be that much older and therefore more difficult to place, as well as the families who feel the heartache of the child they lost and probably a struggle with their faith since they felt they had a call but it didn’t work out the way they had expected.

If you are beginning an adoption without the full amount of funds available you should give serious consideration to how you expect to make up those funds.  Ideally you would have a large portion of it when you start and a plan for how you are going to bring in the rest.  Tax refund, selling stocks, home equity loan, fundraisers, whatever.  While fundraising for adoptions is still controversial with some adoptive families and can have some unforeseen consequences, it has become a common practice.  People who are well-connected in the community, have churches with active adoption ministries, or even with popular blogs have highly successful fundraisers.  But what if no one wants to buy your T-shirts and your yard sale is rained out?  Make sure you consider carefully how and when you think the money will be coming in, and remember that you can choose to delay several months or a year before starting the process if you need to be more financially secure.

I will write more about adopting two children at the same time in the next post, but be aware that if you adopt two at the same time there is not a substantial savings.  Most of the fees will be doubled because all of the paperwork, visas, and donations still need to be paid for each child.  Your chief savings will be in not having to make a second trip.  Some agencies will offer a discount on their fee if you are adopting two at the same time, but not all.

Some links with resources on finding funds for adoption:

Other related questions to ask potential agencies:

  • Do you offer grants for waiting children?
  • Do you offer a returning client discount?  Military discount?
  • Are the grants automatic or is there an application process?
  • Do you partner with any organizations such as Brittany’s Hope?
  • If I have funds available through an organization such as Reece’s Rainbow or Adopt Together, will you count those towards our bill?  Do you charge a processing fee for the transfer of these funds?
  • Do you have a way for people to contribute directly toward our adoption costs?  Is there a fee associated with this?
  • If people contribute funds that are more than the amount owed to you, will you keep the extra funds or are those returned to us?
  • If I receive notice of a grant after my child is home which is paid directly to the agency, will that amount be refunded to us (since you’re already paid off the bill) or does the agency keep the grant money?

The Business Side of Large and Small Agencies

IMG_0641While people sometimes assume that “bad” agencies charge high fees and “good” agencies charge low fees because they only care about finding children homes, this view is missing the basics of how businesses are run.  Larger agencies often have higher fees because they have higher operating costs.  Supporting a dozen orphanages in China rather than only one is just one of many differences that can add to an agency’s operating cost.  A larger agency will often spend more than a smaller agency’s entire operating cost on humanitarian aid programs alone!

A larger agency will:

  • Have multiple offices in the United States (multiple buildings, staff, etc.)
  • Operate programs in five or more countries (adds travel to multiple countries)
  • Have in country offices in multiple countries (buildings, staff, taxes to multiple countries)
  • Operate aid programs in the countries where they have adoption programs (again requires more staff and travel)
  • Sometimes will continue to operate aid programs in countries where international adoptions have closed such as Guatemala or Cambodia.

Now maybe you’re thinking “That’s all well and good, but I can’t really afford to pay more in agency fees because they have to pay a lot of staff.  I’m all for donating to charity but I can donate money to my own charities after I have this adoption paid off!” That brings us back to deciding what is most important to you and choosing an agency based on that.  While humanitarian aid programs are an important factor to some people, it is by no means the highest priority for most families when choosing an agency.  

While you might think that smaller agencies would be less costly although a smaller agency might have lower fees, they end up with more profit per adoption than a larger agency with higher fees because of the higher operating costs for larger agencies.  One large agency told me that they actually lose money per adoption, but they are able to make up the difference because they have other sources of income such as investments, heritage camps, and major fundraiser activities.  These are all things which smaller agencies who operate on a much smaller profit margin don’t have the ability to use to offset their costs.  

Smaller agencies have their own problems when it comes to pricing.  Smaller agencies seem more likely to use the travel costs as a way to generate more income.  Since most people focus on whatever is labeled “agency fee” on the cost sheet, and because travel costs vary by time of year so much, it is easier hide some extra fees in that column.   As I wrote in the last post, larger agencies can use their travel groups to obtain group rates at hotels or with guide services.  Smaller agencies aren’t able to do this.  This is is a generalization that doesn’t hold true for all agencies however, so use the questions in the travel section to try and figure out if you will be facing unexpectedly high travel costs with an agency that seems to have lower fees overall.  One good question to ask to try and determine if the agency is padding the travel portion is “Will I be able to receive an itemized receipt for the travel costs?”

Why am I giving you this general information about operating costs?  Because there is a lot of money involved in international adoption.  When you’re running low on funds and feeling stressed it is very easy to feel that the agencies are all about the money.  Someone out there probably is getting rich off of adoption.  But for most agencies, big or small, the decrease in international adoptions paired with rising overseas costs means that they are doing all they can to stay in business.  Agencies can and do close and the reality is that they need to bring in some money in order to stay in the black.  You need to use your financial resources the best you can so that you can bring home your child, and similarly your agency needs to use their financial resources the best that they can so that they can continue to help children find families.

Other posts in this series:

Which comes first, the agency or the child?

Comparing Agencies

Special Adoption Situations

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