Making a profit through adoption

It has been more than 150 years ago since the first modern adoption legislation was passed in Massachusetts. Since then, a business model of adoption has evolved, one that has received constant criticism for at least fifty years, but has never really been redesigned or reformed.

Thirty years after the first modern adoption act, several syndicated news papers ran a story about baby brokering in New York City. The article contained a striking phrase:

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This article about baby brokering in New York City was no isolated incidence. As early as 1892, the Chicago Tribune ran ads from doctors in Chicago looking for pregnant women to relinquish their babies for adoption. And in 1901, that same newspaper stated in one of its articles:

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The issue of a demand exceeding supply was not limited to the infertile in New York City and Chicago. Retirees in early 20th century Pasadena discovered an empty nest was unsettling. The solution? Adoption. The demand for children to help alleviate the boredom of early retirement was much bigger than the availability of children for adoption.

Throughout the 1930's, newspaper after newspaper ran stories claiming the demand for adoptable infants far exceeds the supply. On December 19, 1932. The Cradle apparently had a waiting list of 1000 couples wanting to adopt, while only having 24 babies available. This having to wait made it particularly frustrating for those couples wanting to have a baby before Christmas.

During that same period the first inter-country adoption scandal emerged from Canada, where the Ideal Maternity Home was involved in both illegal adoptions and insensitive care rendered within the institution, a combination of practices still existing today in many sending countries.

In the 1950's the situation behind child trade got so out of hand, Senator Estes Kefauver held congressional hearings about baby brokering. The transcripts of the hearings sketch a vivid image of the practices taking place at the time. Despite the evidence of inter-state and inter-country child trade, federal regulation of adoption never made it in the US. There were numerous efforts to do so, and Senator Kefauver was by no means the last to hold a congressional hearing on the issue of baby brokering, but for some reason, Congress never had any appetite to enact legislation to regulate adoptions.

To this day, adoption is considered a State affair, recognizing only the Family Law aspect of it, ignoring the inter-state commerce aspect. There is no clear rationale given for this partial dismissal, but it seems declaring profit making from the sales of children, to be illegal, satisfies enough members of congress to stay inactive on the issue. Ignore it and it will go away. And away profit making child-trade went. It went to South Korea, to Mexico, to El Salvador, Guatemala and Honduras, and it went to Romania and Bulgaria. At last count, profiting from child trade has last been seen in Ethiopia, while never really disappearing from the United States.

Although proposed law after written law suggests making profit from the sale of children is illegal, it is a practice that still exists. Although convention after convention child advocates insist trading children for money must be stopped, the corrupt activities maintained within the adoption industry are even more pervasive now than it has ever has been.

In many ways there is a lack of desire by lawmakers to address the profit-for-child issue properly, and in equally many ways, there are corrupt officials in various countries, lining their pockets with the profits they are supposed to fight against.

The lack of desire by lawmakers to abolish profit making from the placement of children, is most evident when looking at

. The Hague convention, as a result of negotiations with the US, allows for-profit agencies to be approved. Therefore, on the one hand, the Hague Convention claims to remove the profit incentive out of the procedure, the Hague Convention also allows parties to participate whose business purpose is to make a profit.

The novelty, The Hague convention introduced, was the notion of a

. Each signatory country of The Hague convention agrees to the creation of a central adoption authority, which is responsible for the accreditation or approval of adoption agencies. Central Authorities are also responsible for the monitoring of agencies. The assumption made is that central authorities will not be corrupt and have the man power to actually monitor adoption agencies.

Unfortunately some central authorities in sending countries, such as those of India and China, are involved in the cover-up of child trafficking practices, whilst the central authorities in receiving countries prefer not to address these particular issues. Just this year, the Dutch central authority, blocked investigations into child trafficking in China, because Chinese authorities had threatened to retaliate such actions with diplomatic and economic sanctions.

It is safe to say, in the current climate is no real effort being made to curb profit making in adoption. Central authorities are only forced to come into action when police catch a child trafficking ring. This typically results in a temporary moratorium on adoption, much to the chagrin of prospective adopters, adoption agencies and orphanages.

Most adoption reformers, throughout the ages, have sought ways to end the profit making aspects of the adoption process, yet neither lawmakers nor regulators were eager to really work towards this lofty goal. Still, even if lawmakers and regulators really made an effort, the question remains if profit making would be outlawed. A question much deeper than how to regulate the adoption market, is the question if it is possible to get profit making out of the adoption process. If we can answer that, we can reasonably look into the practical measures that need to be taken to ensure safe child placement through adoption.

Before we can try to get an answer to the question whether it is possible to remove profit making through adoption, we need to look at where profit is being made. We also need to define what actually constitutes profit and whether money has a side effects beyond profit.

In accounting profit is defined as the revenue of an organization minus its expenses. Most adoption agencies are non-profit organizations, so their revenues should equal their expenses, in order to not make profit. Yet there is no law that forbids someone from registering a 501(c)3 and generate a personal income with that organizations. In fact, some founders of adoption agencies, pay themselves for their work as executive director a very handsome salary.

In several cases, the compensations paid to executives are even directly related to the revenues and the expenses of the organization over the fiscal year. So while the organization itself is legally not for profit, its executive director has every incentive to maximize revenue and minimize expenses to receive a higher personal income. More concise: the executive director's compensation in several cases is the profit made by the organization.

So the issue of profit is much more subtle than the mere usage of non-profit organizations. Even if the personal income of executives of adoption agencies were not directly linked to the sales figures, there would still remain a dependency on the number of children placed. The more children an agency places, the better it can meet its payroll obligations. Even without ill intent or greed, in order to exist, every adoption agency must depend upon the placement of children for adoption.

Income dependency is a much bigger issue, than profit making greed could ever be. Not everyone working in adoption makes excessive money. In fact many receive nothing more than a "reasonable fee", but the way the business model of adoption works, even that reasonable fee creates an economic bias to place more children for adoption.

On the supply side of the adoption process, orphanage directors receive (mandatory) donations from adoptive parents. For each child placed, several thousands of dollars is being paid directly by adopters to the orphanage. Although many claim this donation helps pay for care given to the soon-to-be adopted orphan, it's hard not to see this exchange as being money paid in exchange of a child.

On top of that, there are many adoption agency related foundations, supporting orphanages involved in adoption. Apart from the fact a construction like this creates enormous loopholes, enabling for example the purchase of a higher position on an agency's waiting list, it also creates an extra incentive for orphanages to make children available for adoption. The larger the number of adoptions, the larger the client base of the adoption agency, the more money will be donated to the foundation.

Based on the model of operation, it's fair to say throughout the supply chain of adoption, people working in the field have an economic bias in favor of adoption. And while greed certainly plays a role in this, income dependency is enough of a motive to influence the decision about placement options in favor of adoption over other possibilities.

Given the many ways in which money now influences the adoption process, it's wishful thinking to eliminate the profit or income related aspect completely. In that sense, the Hague convention has proven to be a completely naive strategy, even when there were only accredited non-profit organizations and no approved for-profit organizations active. The notion of a reasonable fee, as defined by The Hague, already has the corrupting influence, the conference aims to address.

There is much to say in regards to stopping inter-country adoption altogether, a suggestion that will not fly with many. The problem is, as of yet, there are no real substantial proposals being presented to those wanting to provide safe placement for children put in care. Is there an alternative, one that can curb the influence money plays in the process of adoption? Before we get into what can be done for children, let's ask the question, is making a profit, through the adoption process, such a bad offense?

When the adoption supply chain is one big market place, filled with accredited or approved players, the influence of money cannot be denied. The influence is pervasive and it negatively impacts the best-interest of children. Even worse, some adoption agencies are involved in all parts of the adoption process. In some cases, agencies control the entire supply chain from orphanage to the actual placement of the child with an adoptive family, often including pre- and post-adoption services. When business is so convoluted, there is no way of controlling the influence of money.

Adoption doesn't have to be so convoluted or susceptible to corruption. The process itself has known distinct phases that can help segment the market. If we were able to define the distinct phases in the adoption process and actually separate those phases from one another, there is a way to curb the influence money has on decision making.

Making money, or earning an income through adoption services is not a crime. However, the way in which money is used to influence child placement can be questionable, at best. Consider the ways in which money can influence three main decisions:

• Type of child placement. A child put in-care can be returned to its original family, whether kinship care is an option, or foster care. The child can be kept in, institutional care, or the child can be made available for domestic or international adoption.
• Prospective adopters approval. How does money influence an agency's willingness to made an adoption work?
• Parent-child partnering. Is a child being placed in a home because that home will meet the needs of that child, or is that child being placed with certain people because those people can afford the bills/associated costs that come with the adoption process?

As long as these three decision can be made without money playing a role, the rest of the adoption process can have a for profit motive, without endangering the child's best interest. If adoptive parents want to pay top dollars for a Cadillac preparation training, or like to pay for luxury treatment while abroad, or for the number of titles their adoption attorney has, it should in principle not be an issue.

As long as adoption agencies are involved in all aspects of placement, there is no way of getting out of the mess that has been created. By splitting the market in different segments that are strictly separated, there is some possibility for improvement.

On the demand-side there is one major decision that needs to be made. Should a prospective adopter be accepted or approved to adopt, or not? This weeding-out of future parents is now done in the form of home studies, performed by a social worker whose role we will call

. There are many things wrong with the way in which home studies are conducted and documented. First of all there is no uniformity, or standards that must be met in order to receive approval. One service may be more strict, (or more lenient), than another in the various states. Therefore, it's possible to easily obtain a positive home study in one area, while not meet approval in another.

More disturbing is that home study results do not have to be registered into a national data-base. As a result, people being rejected in one home study, can simply start shopping for another social worker that will write a favorable home study and still be allowed to adopt. A register of performed home studies, would make it possible for social workers to know when they are being asked for a second opinion, so they have the opportunity to consider previously made assessments in their decision.

Such a register also allows for the collection of statistics about home study specialists. Pass-fail ratios could be a helpful instrument to monitor the performance of home study specialists. A 100 percent pass-fail ratio, would indicate a home study specialist is not doing any actual screening.

The home study specialist should be a registered and licensed social worker, who operates independent of any other party in the adoption supply chain. No financial relationship should exist between the social worker and the adoption agency, or any other party involved in adoption.

On the supply-side the major decision that needs to be made is simple. What form of child placement is best for the child in-question? For some children, placement with their original family is the best option, for others foster care or kinship care is most suitable. Some children would fair best in an institutional setting, while for others domestic adoption or inter-country adoption is in their best interest.

The decision, what form of child placement to apply, should be made by a small team of professionals. This team may include a licensed social worker, a registered nurse and a physician. We can call this team

. Like home study specialists, child placement specialists should be independent of any other party in the adoption supply chain. This is certainly not the case in the current situation. The decision over the form of child placement is nowadays mainly made by the orphanage a child resides. Often the decision is formally made by a social worker, but as employee of the orphanage such a decision will likely have a bias towards adoption.

Only if child placement specialists are independent of orphanages, is there a chance the decision can be made in the best interest of the child. The decisions made by child placement specialists should be registered with the licensing organizations, so the decisions can be monitored and evaluated. When child placement specialists deviate from best practices or are found to be corrupt, their license should be revoked.

Once the decision has been made to place a child for inter-country adoption, the current practice is to place that child at the top of an agency's waiting list. This practice is in no way in the best interest of the child involved and it reflects a hidden truth that adoption in its current form is about finding children for families, not the other way around.

Proponents of inter-country adoption have called for an exchange of adoptable children to better match supply and demand, but it would be far better if there were an exchange of prospective adopters, so those involved in the matching decision would have a choice or suitable parents available for a specific adoption.

The current, near automatic assignment of adopters and adoptees eliminates an important decision, that should be made explicit. A licensed social worker, independent of any other party in the supply chain, should make a decision what family to place a child with. Such a

. should choose from all prospective adopters in the exchange the best possible candidates to place a child with.

Creating an exchange of prospective adopters has great benefits on the decision making about the child placement and has an ironic positive side-effect; it eliminates entitlement from the adoption process. The current practice with waiting lists makes the reception of a child into an entitlement. As long as the program continues to exist, prospective adopters are almost guaranteed to receive a child. The longer they wait, the sooner they will be served.

With an exchange of prospective adopters that entitlement disappears. Waiting time no longer would be the deciding factor, but suitability. With an exchange, highly suitable prospective adopters will be chosen much quicker than now is the case, while adopters that are not all that suitable will have a chance of never receiving a child.

The exchange program presented also reverses the supply and demand role of adopters. Instead of demanding children, they become a supply of possibly suitable candidate parents for a child. In the current business model, the higher the demand for children, the larger the pull for children, the bigger the corruption. With an exchange, this gets transformed into the more prospective adopters to choose from, the more options for a children that is best served with adoption. With an exchange, the bigger the supply, the better it is for children.

If the adoption supply chain gets segmented as suggested and described, the role of the adoption agency becomes limited. An agency's focus can go towards preparing and facilitating the prospective adopters experience. This, in and of itself, can be an entirely commercial practice. With a more limited scope, adoption agencies can finally start working in the interest of their customers, making sure prospective adopters have the best adoption experience possible. Of course adoption agencies can no longer have an influence on the availability of children.

Home study specialists can receive payment through adoption fees, while proper monitoring through the registration of home studies with the licensing organization, can help keep home study specialists honest.

Matching specialists too can be paid through prospective adopter fees. This fee should be a fixed amount to be paid by the prospective adopters matched with a specific child. By signing up with an exchange, prospective adopters express their willingness to pay that fee. Since all prospective adopters in the exchange have expressed their willingness to pay that fixed fee, no preference can exist based on money paid.

The child placement specialists cannot be directly paid through adoption fees. If that were allowed, an economic bias towards adoption could cloud the decision making. For home study specialists and matching specialists such restrictions do not exist, both can have a complete bias in favor of adoption, as long as they are able to critically assess prospective adopter's suitability.

A child placement specialist on the other hand cannot have such a bias, neither financially, nor on personal grounds. A professional assuming this role should not have a bias towards any specific form of child placement, but should make a decision based upon the best interest of the child. Every child deserves the best possible placement and any bias towards one form over the other is against the child's best interest.

As a result child placement specialists need to be paid through other means than adoption fees. Public funding is the most likely option, especially since the decisions made are part of a larger child welfare program than just adoption. Rich countries may be willing to help poor countries fund these programs, especially when the work is strictly regulated. Funds for the payment of child placement specialists can be regarded as respectable causes for donation.

Orphanages can keep receiving donations for each child placed in-care. Since the child placement decision is no longer part of the orphan care process, there no longer is a conflict of interest. As a result, a lot of corruption gets removed. It no longer is lucrative to illegally acquire children to funnel them through the system in exchange of a donations.

Donations will still be received, but the influence on receiving them gets eliminated by segmenting the market. This in fact benefits orphanages. The less corrupt they are, the more trustworthy they become. As a result they are more eligible for donations and possibly for public funding. Corruption always costs at least as much money as it generates, but often much more. So eliminating the possibility of corruption at orphanages and the routes of children towards those orphanages will cost the governments of the sending countries less than maintaining the status quo.

The business model used for 150 years has proven not to work in the best interest of children, nor does it work in the best interest of vulnerable parents. It doesn't even work in the best interest of adopters. The number of disruptions and dissolution of adoption indicates the dramas taking place in families after adoption. Discoveries of child trafficking and fraudulent paper work are equally devastating to adopters. So even while the demand and monetary influence of prospective adopters is the cause of all that is wrong in adoption, it doesn't do adopters much good either.

The reason why the current business model doesn't work is clear: there is too much conflict of interest, as a result of which, all decisions to be made in the process, get influenced by the money involved. That influence leads to a pervasive economical bias in favor of adoption. It also leads to an underutilization of the commercial opportunities in the adoption market. If adoption agencies can free themselves entirely from the placement decisions, they can fully work on behalf of their paying customers. The agency can make certain their customers are prepared in the best way possible. Agencies can assist adoptive parents in presenting themselves favorably with the exchange. Agencies can assist adopters with all legal matters and they can provide all sorts of post adoption services, both for adopters and adoptees. All this can in principle be done entirely for-profit.

All this requires fiercely independent, ethical professionals, so licensing should be coupled with strict monitoring and compliance to ethical standards. Independence frees professionals from all commercial activities an adoption agency is involved in, so they can focus on the job they are trained and licensed to do.

In the current business model, many social workers are mostly favorable towards adoption in principle, which leads to a lot of criticism towards the work, by those that oppose current adoption practices. In the proposed segmentation of the adoption supply chain, personal bias no longer plays a part for two of the roles social workers can assume. Both home-study specialists and matching specialist can be completely pro-adoption minded professionals, as long as they are doing a good job assessing the needs of children and prospective adopters.

Eliminating the corruption in the adoption supply chain will save money, both for prospective adopters and for governments. It will even benefit adoption agencies and orphanages when the pattern of countries closing and opening again gets broken. Corruption is the number one reason for countries to ban inter-country adoption and each ban costs orphanages and adoption agencies income they need. Every year several adoption agencies go bankrupt because a country closed for adoption. As a result adopters can no longer be provide with the post-adoption services promised.

As with any case of eliminating corruption, redesigning the adoption supply chain will cost some people money. In this case, those most hit and hurt will be the people that enrich themselves unjustifiably in the current system. It's inevitable much opposition from that direction will come when trying to change the status quo, even when the proposed segmentation of the adoption process is in principle beneficial to anyone else.