Nonprofit adoption agencies often profit someone other than children, families

By law, private adoption agencies in Georgia are supposed to operate as nonprofit organizations.

The law, however, doesn’t preclude big salaries for the agencies’ executives, or self-dealing by their corporate officers or high overhead costs that don’t benefit the children the groups are supposed to help.

For many private adoption and foster care agencies, nonprofit status in the child protection business leaves plenty of room for lucrative rewards, according to an investigation by The Atlanta Journal-Constitution.

The newspaper’s review of federal tax returns and other public documents found numerous examples where top executives’ compensation accounted for one-fourth to one-third of agencies’ budgets. In many instances, administrative costs exceeded expenses on direct services for children.

For example, Faithbridge Foster Care Inc., in Alpharetta, spent $293,311 in 2008, according to the tax return it filed for that year with the Internal Revenue Service. It paid its executive director $70,325. It spent another $4,200 to rent a building the director owns (on an annual basis, the rent payments would total $16,800). It paid $40,971 to rent office space from a company belonging to the chairman of its board.

Altogether in 2008, the agency devoted almost 40 percent of its budget to its top officers.

Another agency, Dayton, Ohio-based Phoenix Homes Inc., which operates a branch in Snellville, paid $1.8 million in 2008 to a management company belonging to the nonprofit’s president. Phoenix also paid its president about $200,000 in salary and other compensation. A vice president who also works for his boss’s management firm collected $117,000 in salary from the nonprofit.

Families First Inc. of Atlanta paid six employees more than $100,000 each in 2008, according to tax documents. It also paid about $32,000 to a board member’s company for investment services; meanwhile, the value of the portfolio the firm managed for the agency dropped by almost $1.1 million.

Many executives of adoption and foster care agencies say government budget cuts and fewer charitable contributions have left them strapped for money. Financial troubles recently forced the Catholic Diocese of Savannah to announce it would close St. Mary’s Home, which has housed foster children since 1875.

The agencies’ finances — especially concerning how they spend, rather than raise, money — is a touchy topic for many nonprofit executives. Most of those contacted recently declined to discuss the matter.

A lack of industry standards and government rules enable people running such agencies to spend freely for their own benefit, said Pablo Eisenberg, a senior fellow at Georgetown University’s Center for Public and Nonprofit Leadership.

“What you’re finding is certainly the trend in nonprofits,” Eisenberg said. “An increasing number of people are pushing for a kind of free market in nonprofits.”

He described directors who don’t challenge excessive spending as “totally incompetent.”

“There’s no accountability,” Eisenberg said. “There are no guidelines by the IRS, even on self-dealing. It’s just appalling.” 

Big salaries, overhead

For many agencies, the free market approach especially applies to executive salaries.

For example, Chinese Children Adoption International, which has an Atlanta office, paid its top two officers — who are married to each other — a total of about $410,000 in 2006, the latest year for which its tax returns are available. The total budget for the agency, headquartered in Centennial, Colo., was $5.2 million.

Similarly, in 2007, Open Door Adoption Agency Inc. of Thomasville paid a total of $201,000 to its two top executives, also a husband and wife, out of a $1.2 million budget.

Some agencies devote significant portions of their budgets just for one executive’s salary. For instance, Alpharetta-based AAA Partners in Adoption Inc. told the IRS that its executive director’s total compensation for 2008 was $107,747 — one-fourth of all its expenses that year.

The adoption and foster care agency Bethany Christian Services, based in Grand Rapids, Mich., with offices in Atlanta and Columbus, paid 72 employees at least $50,000 in 2007, according to its tax returns. The chief executive earned $169,000, while the agency’s vice president collected $178,000.

Bethany had a total budget of $9.1 million. However, $7.2 million, or almost four of every five dollars, went to management expenses. Another $1.2 million covered fund-raising costs — far more than the $694,000 that went to programs that directly served children.

The agency put more into employee pension plans than into children’s services.

Bethany collected $803,225 from the Georgia Department of Human Services for supervising foster children in 2009, state records show. The state money covers administrative costs as well as direct services to children.

Faithbridge, where the executive director and the board chairman received 40 percent of all spending, received about $75,000 from the state in 2008. The agency said in tax documents that the public money helped offset $145,969 in expenses for placing foster children. In its tax documents, the agency said it “partnered” with state agencies to “provide foster homes for children and return children home to extended families.”

Bill Hancock, the agency’s executive director, did not respond to messages requesting an interview.

Faithbridge disclosed to the IRS its dealings with its officers. But it generally avoids public scrutiny.

“The organization,” Faithbridge says in tax documents, “does not make its governing documents, conflict of interest policy and financial statements available to the public.” 

Dimmed outlook

At some agencies, executives work for next to nothing, or even less.

Adoption Planning Inc. of Atlanta, for instance, reported on its most recent tax return that it paid its executive director, Rhonda Fishbein, just $2,500 in 2008. The same year, the tax return said, Fishbein lent the agency $28,000 in “working capital.”

The Giving Tree Inc. of Decatur received a $25,000 interest-free loan in 2007 from its executive director, Yvette Bowden. Her compensation that year totaled about $67,000.

And Christian Homes Inc. of Pavo, near Valdosta, reported on its most recent tax return that none of its $54,580 budget went to salaries or any other expenses other than services for children.

For many agencies, especially those that rely on public money, the financial outlook has dimmed.

The state has cut payments to many agencies because of deep budget shortfalls. Consequently, some organizations say they are struggling to survive.

For eight years, Morningstar Treatment Services based its annual budget on state payments to house 58 children in its Youth Estate group home near Brunswick. But now the state pays only for 48 children, and Morningstar is “taking a $60,000 to $70,000 hit a month,” said Barry Kerr, the agency’s chief executive officer.

“I don’t think there’s an administrator you could interview who would not say it’s not having a significant impact,” he said.

Morningstar spends relatively little on fund-raising — $186,000 of a $10 million budget in 2008. Executive salaries also trail those at many other agencies; Kerr’s salary and expense reimbursement totaled $115,000 in 2008. The only self-dealing the agency reported to the IRS involved the payment of $51,304 to a consulting firm owned by a Morningstar employee.

As public money becomes scarcer, some agencies have tried to get more private funding. For instance, The Bridge, a group home in northwest Atlanta, has increased its reliance on private donors to an amount equal to one-fourth of its annual budget, said Tom Russell, the agency’s chief executive officer.

Even so, only about 5 percent of its spending goes into fund-raising efforts.

By contrast, Georgia Agape Inc., an Atlanta foster care and adoption agency, spent $273,000 on fund-raising in 2008, or 17 percent of its total budget — even though it relies heavily on government appropriations.

 How we got the story 

This is the final installment in a four-part series on the regulation of privately operated adoption and foster care agencies in Georgia. 

For today’s article, The Atlanta Journal-Constitution examined federal income tax returns for most of the 336 private foster care and adoption agencies licensed in Georgia. Federal law allows public inspection of nonprofits’ tax returns. Most of those documents are available free online from organizations such as the Foundation Center (www.?foundationcenter.org) or GuideStar (www.guidestar.org).

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Adoption 4 profit, it's more fun.

 

Oh pleeeze,

We all know most of these people are not in the adoption industry because of the welfare of children. 

 Adoption is big business, big travel expenses, dining out, pay off's, two offices, one at home and one on the main drag. As we have seen just about any hillbilly and her husband can go from running a truck stop in Wyoming to a non-4-profit in Utah.   Adoption is the new, vacation cruise it is it's  own vacation package. 

The adoption industry is a old business, which has revitalized itself, glamorized itself, and has a face-lift. Owning an adoption agency has sex appeal.  No longer just for the infertile, or Godly.  It is now more popular than owning a McDonald's franchise.  Same mentality of business owners except instead of flipping burgers, they are flipping children.  Instead of the two all beef patties, special sauce on a sesame seed bun, adoption agencies sell "underprivileged, found starving, homeless, special needs, suffering, war-zoned children! You fly off into the clouds, arriving in a poor country by your standards, pick up you your "order" see some sites, and fly home, with your "happy meal" or gender toy.  Adoption, the "take out" corporation.

Growing faster than a fast food franchise, an industry that only encourages poor people outside of the U.S. to produce more babies for the sake of giving them up for money. We have all seen the stories.  An industry that encourages people to take hills tribe children from their parents in order to be adopted to Americans.  To take Indian children from their families.  It has perpetuated into an industry that encourages young girls to lie about their age for the mere purpose to be adopted.  An industry controlled by the fat cats, skimming off the cream(children) and leaving the milk to sour. 

Natural disaster hits, it becomes a "feeding frenzy"  for adoption agency's and their GOD.  Send all your man power to the region, "save the children", they are more valuable than gold itself. Hire buses to move them out of the disaster zone, even over borders.  Opps, we forgot to bring them water, food, and clothing. 

 STOP!  The children are traumatized enough with out the "saviors" causing more emotional damage.

God, a better way of life, education, a family, food, adoption is a way to provide the necessities to foreign born children. Whose necessities, the necessities that are valued by those in the developed world, of course.  Bring us your poor, uneducated, homeless, we don't care how you do it, steal, barrow, barter, pay, just get them for us, and you too will be rewarded in the "kingdom". 

Just like fast food joints compete with their "specialities" so do adoption agencies.

A menu of children, with their pictures, and price can be seen.  The menu will describe their ethnicity. Depending on their "color" or flavor, they can command a higher price.  A fast food chain promotes aged beef but that is not the case with children.  The younger ones are the most tender, needing less chewing,  so most preferred.  Baby Mac, Junior Whooper, Mckids.  Don't eat beef, well try our "vegetarian" child, picked beans this morning with Mum, in the field, but now is labeled an "orphan".  Leaning towards being more altruistic than the rest, then we have what we label the "daily special", a flavor so unique, requiring care far beyond that of any other.

 

Adoption agency owners have perfected this business, worked out all the tweaks, or so they think.  One agency in Western Samoa, even hired a "cattle driver" to round up his "meat", taking tips from the fast food industry.  A "holding pen" was devised to keep the meat from it's parents, just long enough to be considered an "orphan". The did all they could to bypass the middleman.  Rushing adoptions, hiring police escorts to get the kids out of the country so the father could not get his son.  Now that would be considered a form of drive-thru adoption.  The meat is sizzling hot, right off the grill,  it needs to be delivered to it's paying customer overseas.

With any commodity, some goods will not be of our liking, and it is the same with adopted children.  If say for instance, after years of being in your home the child does not taste as good as you thought it might, well, you can recycle that adopted child. You can drop off that child at the nearest remote island, lets say Samoa, or even Russia, or go under-ground and shirk off your McChild to someone else.  Heck, no one really wants your damaged goods, but it now has become as trendy as adopting, so if your lucky, no one will ever know.  Unless of course, you forget to give them their "legal documents" so they can start their own life.

 

Adoption is a fad, a child that does not look anything remotely like you is a status symbol, to be worn as an adornment. Hollywood types start the fads and the average joe tries to perfect on it.

 

In London, they call it "take away"

...instead of "take out". Both are appropriate metaphors, here or there.

Hollywood face-lift, with fries

Great analogy!  If beef patties (older infants and young children) are the meat of a menu, then the fries (newborns) must be the potatoes... after all, not everyone goes to McChild's for the aged processed meat-items.  Some go just to get a quick fix, one that will not ruin their image or million-dollar figure.

The latest celebrity adoption shows how easily impressed people are when a I'm-not-a-diva celebrity "chooses to adopt" locally... supporting local growers.  In theory, these "saviors in Adoptionland" are not only preventing a child (newborn) from entering a care-system known for it's horrific, damaging ways, they are preventing abortions and dumpster-dumping.  A double-whammie of wholesome goodness... just don't look too closely at the list of ingredients, they just might scare you.

Buying a newborn from the fast-food adoption menu is simply saying, "I don't want anything that has been sitting under the damaging lights; I want my order to be super-fresh, and I'm willing to wait... just make sure I get the first fresh batch."  <showing the cash>

Meanwhile, ask a well-paid executive / industry spokesperson how the food (for the customers with cash) was found.... more than likely the person up-top will try to assure all concerned consumers, no items were stolen or lured away from their families/mothers... no lives were hurt; no damage was done.  [See The dark side of Chinese adoptions, for a tasty sample.]

How's that Hollywood happy meal looking and smelling right about now?

Adoption only when it is in the best interest of the Child?

One tends to wonder who should make the determination of what is "in the best interests" of the child.  I cannot imagine an adoption agency not having a conflict of interest and therefore should not be allowed to make this determination.  Then it is left up to the country the child is coming from (who could be subject to bribes and fraud) or our own government (which is not trained in moral issues only to look at the paperwork)

    

 

Babies Onboard

 

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adoption agency determine "best interest" = adoptee train wreck

 

 "adoption agencies, determine the "best interest",  

gee, what are you putting in your "happy valley punch"?

Adoption agency would determine "best interest" on the basis of "self-interest".

Most if not all are complete morons, who's hearts and bank accounts  have been filled with greed.  Most are uneducated, in basic education let alone the psychology of a child. Most don't give a turkey tail (One adoption agency in Western Samoa, set up a nanny house, to skirt around the "orphan" issue and actually fed the kiddo's turkey tails.)about the genuine welfare of where a child ends up when they are placed.

Adoption agency owners have brains the size of pea's.  So the term "best interest" would confuse them.  They would associate it with the highest dollar amount. Countless cases are out there were a child was placed with a evil single sick psycho sex fiend, or abusive parents, or convicted criminals, who they themselves were adoption agency owners.

The strict regulation of adoption agency owners needs to be enforced, no more "fly-by-night, morons, with their own unethical standards should be allowed to "deal" with children, the risks are to high for the children involved.  So they become the "victims" at the hands of complete idiots, who opened up their "mom and pop" adoption agency, on a whim.  And these children who are the victims, they suffer a lifetime.

Regulation

I totally agree with you that existing regulations should be enforced, and in many states stricter regulations should be implemented, the question is how to approach that.

It's not only within the adoption industry that we see regulations are not being enforced. Just take a look at the recent oil spill in the Gulf of Mexico, the recent mine accident in West Virginia, or the liquidity crisis on Wallstreet, some 18 months ago. In each and every of these cases, either important regulations were removed over the last 30 years, and/or the regulations that were in place were not actively enforced.

For nearly three decades, the "free market" has been able to maintain a nearly divine status, and only relatively recently (due to the economic downturn and massive losses on 401(k)'s) have people come to realize that deregulation is probably not the right solution.

Unfortunately, the political arena has not caught up with the notion that more and better regulation is needed. Part of the reason lies in the fact that many members of the federal and state legislature have had their seats for many many years, and most were responsible for deregulation and lax enforcement of existing regulation themselves.

More important though, is the dependency politicians have on fund raising and public opinion to get elected. Getting elected is expensive, and requires financial support of industries. Without money from banks, oil companies, insurance companies, the defense industry etc., no politician will get elected, unlike they are extremely rich themselves.

This creates a climate where politicians are usually lukewarm to any form of regulation.

The adoption industry doesn't have the financial power to bribe people in congress, like other , but they are able to make an emotional appeal, which can make a politician look really bad in the eyes of his/her constituents.

The claim made by the adoption industry is that they are "saving" children and that any form of regulation will cost "poor" children dearly. Those of us who follow the adoption industry with more than average interest, will realize that this claim is disingenuous, but it's not all that easy to convince the many people that have no idea how the adoption industry operates.

The problem we face is that while disingenuous as can be, the claim made by the adoption industry is not 100% untrue. Out of the more than 100,000 adoptions annually taking place in the US, some are in fact in the best interest of the child. The term "saving a child" makes me puke, but despite all criticism I have towards the adoption industry, it's undeniably true they deliver services that can be in the best interest of a child.

Despite all that goes wrong, sometimes adoption agencies actually do find a most appropriate family for a child that really needs placements, and sometimes adoption agencies do deliver outstanding pre-placement preparation and post-placement support.

What makes the claim of the adoption industry disingenuous is that in all reality the families they find for a child, are not the best possible, but simply the top of their waiting list. Some of those families are great, others are horrible, and most are somewhere in between. Some of those families are preparing themselves really well, with or without the help of the agency, others don't prepare at all, despite possible efforts of the adoption agency.

In reality the adoption industry is not in the business of "saving" children, they are in the business of processing adoptions on behalf of (prospective) adoptive parents, and as a side effect of that activity they sometimes do a lot of good for some children, and since it is a side-effect, they sometimes really screw up horribly, or are involved in down-right fraudulent practices at the expense of children and their families.

Lax regulation, as can be seen in many states, has given us many examples of criminal activities (coercion, child trafficking, father's rights violations), but the problem goes much deeper than just the "bad apples". It's not just Scott and Karen Banks, Mai-Ly Latrace, Tedi Hedstrom or Orson Mozes, the usual suspects, that do wrong, it's the entire industry that does wrong. There are certainly horrible adoption agencies, those are even quite easy to identify, but there are no real good adoption agencies, despite all sorts of claims.

Adoption agencies, as I said earlier, are really in the business to process adoptions on behalf of (prospective) adoptive parents. That's not a blame I place, simply a logical conclusion. Adoption agencies require professional workers, who deserve a reasonable salary, and that by itself creates a demand for income. The only means an adoption agency has to generate income, other than fund-raising, is to do enough placements.

The result is blatant, the adoption industry is very much focused on quantity. Many adoption agencies list on their websites how many placements they have performed last year, and trade associations like NCFA and JCICS, when interviewed, dish up the latest statistics on the number of children placed. This focus on quantity is easily related to the need to make a significant number of placements to keep adoption agencies afloat.

Due to this over-focus on quantity, the adoption industry doesn't have much of an eye on quality. This is obvious when regulations come into play. The claim the industry always makes is that more regulation will harm children. The reasoning is completely quantitative. Regulation may indeed lower the number of placements made. The rationale of the industry is that fewer placements means that fewer children can be "saved".

One of the issues with this line of reasoning is that an adopted child is equated to a "saved" child. Without an eye on the quality of placement, it's easy to think in such binary terms, but in reality there are children that fare far worse after placement than they did before. For some other children their life before placement was just as good as their life after placement. For others it will only be a marginal improvement, and there are those for whom adoption is a major improvement over their previous existence. So when we speak of children that are "saved", we only speak of a fraction of the children being adopted.

If the adoption industry were truly in the business of "saving" children, they'd work on quality. Many children could have had much better placement than they did, if only the screening, the preparation or the matching was done better. This would easily increase the number of children in the "saved" category.

Better regulation and proper enforcement of regulations can easily increase the quality of service provided by adoption agencies. Not only can it remove most of the bad apples, it would put pressure on otherwise well-intended adoption agencies to do better.

The dependency agencies have on the placement of children, is completely at odds with the best interest of children. No matter how much we regulate, agencies will remain the tendency to do wrong, it's simply in their nature. So agencies not only need really tough regulation to keep them somewhat honest, they will also need watch dogs that keep an eye on them. Adoption agencies are far too dangerous a beast to operate on the "free market" all by itself.

Something to seriously consider...

As one who was adopted by owners who, on paper "had everything"... including a long history of profound domestic violence AND dysfuntion.... I have often wondered what the relationship between adoption agency and "desperate" adopter was.  Bottom line... money.  My Aparents had enough of it...the rest is/was adoption-history.

I'd like to believe ALL adoption agencies worry about long-term child safety, but the bottom line tells me, most worry about the bottom-line.... money.

Pound Pup Legacy