Market Puts Price Tags on the Priceless

from: The New York Times

October 26, 1998

By LAURA MANSNERUS

The first commandment for couples wanting to adopt babies is: Put yourselves across. And they do, in spunky performances on videotapes, in lush scrapbooks and in professional portraiture smiling on the Internet.

Many speak on the Web pages that crowd electronic registries of ''waiting families.'' Gloyd and Penny, for example, say, ''We pray daily for our birth mother and baby -- whoever and wherever they are.'' David and Paula promise, ''This child will be overwhelmed by love and affection.'' Rex and Carol wait, after 14 years of marriage, with a spaniel named Brittney and a vacation home four miles from Disney World.

This is the essence of demand -- unhappily infertile couples -- competing for a smaller and smaller supply of white American-born infants. It is an imbalance that professionals in the adoption world are calling a crisis, allowing money to play a defining role in determining who will succeed in this desperate quest for that which cannot be legally bought or sold.

''In this marketplace, it's a sad reality,'' said Graham Wright, president of the California Association of Adoption Agencies. ''Luck enters into it, but it's like anything else in life: If you have enough money, you'll get what you think you want.''

Many couples in search of a child are already depleted, emotionally and financially, by drawn-out fertility treatments. Still, they will pay $15,000 to $20,000 on average, even if they have to mortgage their futures, to find their babies. Some will spend much more before the day they appear in court to take legal custody of their children. And a few, people who have the money for intermediaries to do the work, pay up to $100,000 to bring home a newborn.

Adoption is, in a rough analogy to organ transplants, a legal transfer not subject to purchase or bidding. Nowhere in the United States is it legal to sell a child, and few say it should be. Nor can anyone sell the right to be an adoptive parent: that is conferred by the state, based on home studies conducted by social workers.

But scarcity has created a cast of thousands of intermediaries, who can and do sell access to the young women who might relinquish babies.

Access can be sold indirectly, by an Internet service that sells advertising space to couples, for example, or directly, by lawyers or unlicensed brokers known as ''facilitators,'' who will either shop couples to pregnant women or recruit those who agree to let adoptive families be chosen for them.

This has left only the thinnest line between buying a child and buying adoption services that lead to a child. ''The effect is the same,'' said Mr. Wright, whose agency, Future Families of Monterey Bay, places older children for adoption and foster care.

''Everywhere the baby boomers set their feet, a cottage industry springs up,'' said Bernie Riff, an adoptive father. Mr. Riff and his wife, Vicki Young, adopted their daughter, Jessi, 2, with the help of a facilitator after waiting a long time with an agency that gave them, in Ms. Young's words, ''nothing but a binder.''

''There are consultants and facilitators,'' Mr. Riff said. ''There are photographers, there are all these little marketing things. People do videos. There's no limit to what you can spend on these things if you're inclined to and have the resources.''

State-licensed adoption agencies, once strictly controlled charitable and paternalistic institutions, may be pained by the intrusion of commerce, but now they, too, advertise on bus shelters and billboards, and collect scrapbooks and videos from would-be parents to show to birth mothers. They mine connections with foreign orphanages. They do what they can do to increase their supply of children. It is just one measure of growth within this fragmented industry that the number of licensed child placement agencies has increased by several hundred in just three years, to 1,764, according to the National Adoption Information Clearinghouse.

The states impose standards on child-placement agencies requiring certified social workers to evaluate prospective parents, counsel birth mothers and get relinquishment papers signed. They limit payments that can go to birth mothers, who, above all, are not supposed to profit from adoption, and they require reports to the courts of all payments made by the adopting family.

But the laws differ from state to state, creating a tangle that itself keeps lawyers busy and would-be parents confounded. A few states, like Massachusetts and Connecticut, prohibit independent adoptions altogether; some that do allow it, like New York, hew to the traditional model and limit lawyers' roles; California, the most hospitable to the new entrepreneurialism, allows lawyers and facilitators to recruit prospective birth mothers on clients' behalf. Louisiana, known for its laxity, allows nonresidents to adopt and to pay extensive living expenses for pregnant women.

The process, while hardly simple, is basically the same everywhere. Every adopting couple typically begins with a home study. If parents adopt independently, they will probably advertise, although about a dozen states prohibit it. Pregnant women who respond or are referred to them are screened, and adoptive and biological parents exchange basic biographies. If all goes well, the adoptive parents pay modest pregnancy-related expenses for the birth mother and, shortly after birth, she legally relinquishes the child. (If the biological mother decides not to place the child, or, worse, tries to revoke her consent later, the adoptive parents have gambled and lost.) Six months to a year later, a court finalizes the adoption.

The costs for domestic infant adoptions range widely. Some people adopt infants, joyously and quickly, for $5,000 or $10,000 by locating a woman in their own state who has minimal expenses and is certain she wants to place her child. Placements by state agencies often cost nothing.

Then there are couples who pay sums approaching $100,000 for a closed adoption of a white newborn. These gray-market placements, which usually involve questionable payments to birth mothers and the brokers who find them, have prompted much legislation and public attention; still, they are a tiny percentage of adoptions.

Finally, the stamp of the marketplace is apparent in one troubling fact: In the baby bazaar, with children of varying colors, cultures and conditions, something resembling a price schedule has emerged.

At many agencies, race determines fees, said William Pierce, president of the National Council for Adoption, an advocacy group for agencies. ''If you have 40 white couples chasing every white newborn, you don't need a lesson in economics,'' Mr. Pierce said.

The Product
Not Enough Babies To Meet the Demand

If adoption is a growth industry, it is not because of a major increase in adoptions.

No one keeps nationwide statistics on adoptions. The most reliable and recent data come from 1992, when researchers gathered statistics from state agencies for a report on adoptions published by the National Center for State Courts. The number of adoptions reported was 127,441, a figure that demographers believe has not changed appreciably. The authors of the report estimated that two-thirds were adopted by stepparents or relatives, or were older children placed from foster-care programs.

The other third, or about 43,000, constitute the heart of the industry: children, domestic and foreign, placed with nonrelatives. The National Council for Adoption estimates that infants, which it defines as children under age 2, account for 48 percent of all unrelated domestic adoptions or about 24,000 a year. At the same time, according to a rough estimate by the adoption council, about 1 million families are seeking to adopt.

''Adoption from a domestic standpoint is in a period of crisis,'' said Paige McCoy Smith, marketing coordinator for the Gladney Center in Fort Worth, one of the nation's biggest and oldest adoption agencies. Because less than 2 percent of unmarried pregnant women are placing their babies for adoption, they now have ''the option to be very, very selective,'' she said.

Elizabeth Bartholet, a Harvard University law professor and adoption specialist with two adopted children, agrees. Among young pregnant women, she said, ''most of the pressure they are subjected to is to either abort or keep.''

A generation ago, unmarried, pregnant women did not have many options. Some went to places like Gladney or the Salvation Army's Booth homes, where they awaited birth while social workers chose adoptive parents.

Before 1973, the year that abortion was legalized, about 9 percent of births to unmarried women in the United States resulted in adoptions. By 1981 that percentage dropped to 4 percent, and by 1988 to 2 percent. While the number of unmarried women giving birth has risen each year at least since 1965, the net result is a slight decline in the number of American-born infants available for adoption.

The old-line agencies tried to adapt by letting birth mothers choose adoptive parents. But in the late 1970's, would-be parents began defecting to lawyers who could help them adopt independently if they -- or the lawyers -- could find a birth mother directly. The scramble also invited a new type of adoption agency, promising some edge.

American Adoptions of Overland Park, Kan., for example, has a ''traditional program'' in which pregnant women choose from an array of profiles of families, but it advises many clients to sign up instead for another program in which parents pay directly for advertisements, and young women who respond are shown the profile of that family first. In its letter to applicants, the agency says: ''Most traditional adoption programs provide the birth parents with the opportunity to select their 'ideal' family. Where does that leave you?''

The Marketing
Advertising on Buses, Benches and Beyond

Marketing came naturally to Arty Elgart, who started a facilitation service after he adopted his son (from Gladney) 20 years ago. It was a matter of enthusiasm and altruism: Working out of his auto-parts warehouse in Philadelphia, he made matches as a favor for couples he knew, or friends of friends. By most accounts, including his own, no one had seen anything quite like it before. Mr. Elgart placed a small newspaper ad that asked, ''PREGNANT? Young couple wishes to adopt baby. Call Mary, 289-2229.''

In the view of the sedate nonprofit agencies that dominated the adoption community, this crossed a line of propriety. Mr. Elgart's matchmaking was legal, since he charged no fee and advertising was not prohibited in Pennsylvania. But his marketing, which progressed to benches, buses and Burger King tray liners, was called everything from unusual to appalling.

Mr. Elgart has long since turned his mission into a full-service licensed adoption agency, named Golden Cradle, now in Cherry Hill, N.J. But Mr. Elgart no longer has the field to himself.

''Golden Cradle started something,'' said Maxine Chalker, a social worker by training who is executive director of Adoptions from the Heart, said during an interview in her office in Wynnewood, Pa. When she started her agency in 1984, she said, ''in the phone book there were maybe three ads under Adoption Services. Now there must be 40.''

A modest display ad for Adoptions From the Heart is among them. The agency also advertises on bus shelters and in malls, and has tried radio and television, though the response was disappointing. ''We're always trying to find new things,'' Ms. Chalker said. ''It gets harder every year because of the competition.''

Some of the competition comes from lawyers who handle independent adoptions: ''Now everybody thinks adoption is easy money, especially the attorneys,'' Ms. Chalker said. ''Now they're hiring counselors to work in their offices, and setting up as agencies without being licensed.''

Adoptions From the Heart has 33 staff members and seven offices in five states. The agency has an advertising budget of $371,000 this year, accounting for 16 percent of its total expenses.

''The ad budget,'' Ms. Chalker mused. ''It's so embarrassing. It's so much money, and that's just to stay in business.''

To stay in business, Adoptions From the Heart has also extended its connections in China and Vietnam; it has placed 114 babies from China and 16 from Vietnam this year, compared with 47 American-born infants. The agency charges a fee of $14,700 for placement of a white American infant or toddler; legal fees are an additional $2,000 to $3,000, and parents pay any medical costs not covered by insurance. The cost of adopting from China is $17,235 and adopting from Vietnam is $22,100.

''Our facilitator in Vietnam charges $10,000 per baby,'' Ms. Chalker said. ''Can you imagine how rich she must be?''

The Sales Agents
Matchmakers Make Money in the Process

The frontier state for the adoption business is California. The state has long permitted lawyers to recruit pregnant women. Now, facilitation services, which are unlicensed, are also recruiting and screening birth parents, as well as coaching prospective parents and finding them professional help.

Facilitators operate in many states. While their activities often come close to legal definitions of child placement, they are too new or too few to prompt regulation.

But in California, legislation enacted last year to clarify their role ended up legitimizing a whole new class of entrepreneurs. Lil Snee, a facilitator in Los Gatos who co-founded an informal trade organization, estimates that 40 to 50 are operating in the state.

''California decided that the market will dictate costs and the market will dictate who stays in business,'' said Diane Michelsen, an adoption lawyer in Lafayette, Calif. The competition from facilitators, Ms. Michelsen said, simply means that pregnant women can shop around more.

''It's the same pool of birth mothers that's being divided differently,'' she said.

For Ellen Roseman, a facilitator in San Anselmo, the main job is coaching prospective parents. ''I make them read everything,'' she said. ''It's like taking a college course.'' Then she helps them piece together deals with pregnant women, lawyers and agencies, often in other states. She charges a flat fee of $3,450.

At a recent support-group meeting at Ms. Roseman's house on a winding lane in Marin County, casually dressed current and former clients, many with babies in hand, exchanged stories of false starts and disappointments.

''I think it will get easier with time as people know what to expect, but for now, it's a free-for-all,'' Mr. Riff, of Berkeley, said over the potluck dinner that followed.

For Ms. Roseman, a former flight attendant and representative in union negotiations, the enterprise is more like putting together a business deal. ''You sit down and move around the pieces to do two things,'' she said, ''to make sure it's legal and to save money.''

She does not recruit pregnant women, but she gets referrals and interviews candidates. ''To really get the birth parents ready,'' she said, ''you do what's called shaking them out of the trees. You say, 'If you have a little feeling down here telling you to keep your baby, we've got to talk about that.' ''

Ms. Roseman hounds prospective parents, too. With one, she said, ''I insisted that she hit a therapist's office two or three times a week, get into meditation and get a massage to relieve her anxieties.''

Lil Snee, the Los Gatos facilitator, also does what she calls ''hand-holding,'' charging $2,900 for an 18-month contract. Occasionally, clients pay her $95 a hour to interview a birth mother.

''It just feels wrong'' for prospective parents to ask questions ''about sexual partners, about how many men might be the father of this baby,'' Ms. Snee said, so she asks the questions instead.

''I bring the clients and the birth parents the kinds of families they're looking for,'' she said.

That, Ms. Snee said, is her metier. ''Let's say you have a Hispanic-black baby and you have 20 waiting families,'' she said. ''This birth mother is committed, intelligent, clean, but every single waiting family wants an Anglo baby with blond hair. Or I probably have about six cases where the babies are white, but maybe the mother wanted a certain religion, or a home with no children in the family. Maybe she did a little drugs and people are afraid of that.''

In some states, matchmaking for a fee is illegal except by licensed agencies. Among them is New York, where lawyers can handle independent adoptions and advise their clients on finding pregnant women, but not make such an introduction themselves. In New Jersey, an individual -- say, a lawyer or social worker -- may make a match, but may not charge for it.

California's new law does restrict facilitators' practices. They must identify themselves as such in their advertising and must tell prospective parents that they are not licensed adoption agencies. They must obtain a $10,000 insurance bond to cover claims. But the state does not register nor license them, and it does not limit their fees.

Randall B. Hicks, an adoption lawyer in Riverside, Calif., and the author of ''Adopting in America'' (Wordslinger Press, 1995) calls facilitators ''a garage industry.'' Mr. Hicks said they are ''not licensed nor trained to do anything.''

He also finds their fees, which can exceed $12,000, out of line. ''They find a baby for you,'' Mr. Hicks said, ''then they have to turn it over to a lawyer or an agency.''

Ms. Snee, who lobbied for a licensing system to give facilitators credibility, accepts that that only lawyers can transact the actual adoption. But she argues: ''We get so bashed. We provide a service, and just because it involves adoption doesn't mean we should be the saviors of the world and do everything for free.''

Ms. Roseman contends that California's competitive marketplace keeps fees down and that expenses for birth mothers are fairly limited by the state courts. In the adoptions she handles, she said, ''very little money changes hands.''

Louisiana, on the other hand, ''is wide open,'' Ms. Roseman said. ''I always joke, when I want to make a million dollars, I'm going to open an agency in Louisiana and I'll be charging $30,000, $40,000, $50,000. I'm going to get fat eating bonbons in Louisiana.''

The Factory
The Draw of a State With Lax Regulations

Louisiana is where Misty and Donnie Smoot ended up two years ago, when an agency installed them in a slightly down-at-the-heels apartment complex in Baton Rouge. ''I was down there the second weekend after I found out I was pregnant,'' said Mrs. Smoot, who lives in Nashville. Her husband added: ''They try to get you down there and get you stuck.''

It is possible to find a birth mother anywhere in the country, send her to live in Louisiana, pay her expenses and fees to intermediaries, have her relinquish the child in Louisiana and finalize the adoption there, all while living elsewhere. And some couples who can afford it, most of them in the Northeast, do just that.

Most states limit payments to medical, legal and strictly defined living expenses. Louisiana does not, though all expenses must be reported to the court that finalizes the adoption. The state does not prohibit payments to intermediaries, and its Department of Social Services, which regulates adoption, receives no information on agencies' fees.

The Smoots were recruited as birth parents for a couple whose names they never knew. They were living in Tennessee and having marital problems, Mrs. Smoot said, when she became pregnant. Responding to a newspaper classified ad, they said, they spoke to a man named Richard in Florida who explained that he had clients interesting in adopting, and who referred them to an agency outside Baton Rouge.

They were given first-class plane tickets for themselves and their two young sons and moved into an apartment rented by the agency, Beacon House. The agency paid rent and utilities, gave them $150 a week for groceries and ferried Mrs. Smoot to doctor's appointments and group meetings. Mrs. Smoot estimated that Beacon House had 12 to 20 birth mothers in Baton Rouge while she was there.

The Smoots were never told much about the adoptive parents assigned to them; they said they were given a copy of the couple's home study and brief profile, without pictures. They spoke to the couple once, by telephone. ''The father was the C.E.O. of his company, and their net worth was some ungodly number,'' Mr. Smoot said. ''The whole home study was about money, money, money.''

The arrangement unraveled when Mrs. Smoot was found to be carrying twins. Beacon House assured them that both babies would be adopted by the chosen parents, but the Smoots heard through the birth-mother grapevine that, in the past, the agency had separated twins without telling the birth parents.

The Smoots switched agencies and went through with a semi-open adoption, then returned to Tennessee. A month later, Beacon House sued them for breach of a contract that obligated them to pay back expenses if they placed their child through an agency or lawyer other than Beacon House.

The lawsuit, which sought $24,774, was dropped. Beacon House and its director, Anne R. Hughes, who also acts as the agency's lawyer, declined to be interviewed.

As the Smoots explained it, some women they met were drug users who sought a means of support. Some never had any intention of placing their children, Mr. Smoot said, ''but there was one girl there who was giving up her sixth baby to Beacon House. There's several who do that. It's like an employer-employee relationship.''

''This is something the adopting parents need to know,'' he continued. He said he and his wife were barely screened, either by Beacon House or by the intermediary named Richard. ''They should investigate the birth parents a whole lot more than they do,'' he said.

One source of referrals to Louisiana, according to lawyers and investigators, was Richard Gitelman, whose facilitation service in Florida was investigated in the 1980's after complaints were made. The Smoots said that the ''Richard'' they talked to never gave his last name, but several adoption professionals, who asked not to be named, said he has referred birth parents to Beacon House.

Mr. Gitelman is said to be favored by older, moneyed couples who want quick, closed adoptions. Investigators have placed his fees at $50,000 and up; Mr. Pierce at the National Council for Adoption said he had seen a photocopy of a check written to Mr. Gitelman, with endorsement, ''in the range of $75,000 to $90,000.''

Mr. Gitelman, reached at his office number in Coral Springs, Fla., refused to discuss his fees or even to say whether he is still in business. (His National Adoption Counseling Service was declared inactive by the State of Florida in 1996 for failing to file its annual report with the state.)

Mr. Gitelman has never been convicted of anything, though he was indicted and he agreed to a $7,500 fine and a year's probation in Pennsylvania for interfering with the custody of a minor, a pregnant Pennsylvania teen-ager he briefly moved to Louisiana in 1987.

Fees paid in Louisiana are difficult to track. Adoption proceedings are sealed and courts do not submit records to state regulators. But James Best, a district court judge in West Baton Rouge Parish, where Beacon House is situated, said most infant adoptions he had reviewed were smooth and unremarkable. When asked if he had ever seen a $50,000 fee to a facilitator, Judge Best said, ''If I ever did, I'd probably roll out of my chair and say I'm in the wrong business.''

But Lucy McGough, a law professor at Louisiana State University and head of the legislature's advisory committee on adoption laws, said a few judges had told her that they had seen $50,000 fees and had not known how to handle them.

''One was infuriated,'' Ms. McGough said, ''because they were reporting high charges and saying, 'So what's it to you, Mac? All the code says is we have to report it, and that's what we're doing.' ''

Ms. McGough's committee is drawing up amendments to the adoption laws; in a memo to the committee, Ms. McGough voiced concern over ''prime baby adoptions that can bring $75,000 to $100,000.''

Meanwhile, she said, none of the parties are complaining: ''The adoptive parents are happy as clams.''

The Market Price
Children Are Children, But Some Cost More

For the old-line agencies in this marketplace, ''there are Catch-22's everywhere,'' said Mr. Pierce of the National Council for Adoption. They are torn between the principle that children should not be discounted by race or disability and the reality that that is how one creates a larger pool of parents. They are torn between the principle that parenthood should not be charged for and the reality that social services are expensive.

The agencies, many of which receive donations or government subsidies, say that parents' fees could not cover their costs. Mr. Wright in California notes that when licensed agencies work with pregnant women, about 80 percent end up keeping their babies. And for most agencies, he said, ''the cost of serving the 80 percent can't be paid for by the fees of the other 20 percent.''

At the Gladney Center, fees do not come close to covering costs. Thanks to its endowment and its large campus, where about half its birth mothers live, Gladney can offer an array of services: three dormitories, a health clinic, chapel, dining hall, swimming pool and greenhouse, as well as high school and community college courses, vocational training, legal representation and counseling to be available for the rest of the birth mothers' lives.

All of this costs the agency, on average, $32,000 per resident. But Gladney's sliding scale adoption fees only go up to $30,000 and Ms. Smith, the marketing coordinator, said the average placement fee is $20,000.

Many agencies, including Gladney, use sliding scales to accommodate lower-income families. Still, Mr. Pierce said, ''the economics of adoption is going to cause you to prefer the people who pay the higher fee.''

High fees help subsidize the work necessary to find homes for hard-to-place children, at least in the agencies that undertake the job, he said, adding that, in some states, agencies receive ''bounties'' to recruit adoptive families for children in foster care or for disabled children who are costly to the state.

''Say you have a kid who's H.I.V.-positive in the hospital costing $1,000 a day,'' Mr. Pierce said. ''To pay someone to find adoptive parents is entirely reasonable, but what does that look like to the public?''

It may also look terrible to charge less to place minority or special-needs children, but many agencies say they have little choice.

Gladney, for one, has a lower-cost program for African-American and biracial children. ''Unfortunately, we had to create a separate program because adoptive parents were simply not coming forward,'' Ms. Smith said. Under that program, the agency charges $8,000.

Whoever handles them, adoptions in the over-$50,000 range almost always involve American-born white infants. While most are independent placements handled by lawyers, a few agencies market themselves by at least hinting at results. Easter House, a Chicago agency, notes in a letter to prospective parents that those approved this year have waited an average of 34 days to be offered a baby. The agency charges $45,000, ''plus some incidentals.''

But high-priced agencies, whether blue-ribbon or gray-market, have no shortage of customers. ''I hate to say this, because it's going to sound crass,'' said Debra Harder, network director for Adoptive Families of America, a Minneapolis-based support organization. ''But there are people who have the basic philosophy that the more I pay for something, the better it will be, not just in terms of the product but in terms of appearances. It says a lot about me if I drive a Lexus.''

The Imports
Abroad, an Abundant Supply for Adoption

In international adoption, the scramble is entirely different: it is for parents. The Adoptive Families of America's current ''Guide to Adoption'' contains ads for 35 agencies, 33 of which advertise foreign programs.

''Your child is waiting for you,'' the headline on one announces. ''We go with you to China!'' Another says, ''When you wish upon our stars, dreams do come true.''

Most of the long-established agencies involved in international adoptions have ''an altruistic, mission-driven sense that every child deserves a family,'' Ms. Harder said. ''Now, with additional programs opening up in Russia and China in particular, folks are seeing it as an entrepreneurial venture.''

Adoption experts say international adoptions have generated many new businesses, from charitable, church-affiliated agencies to walkup offices run by people who make money change hands in Bulgaria. Fees to foreign expediters, translators, lawyers and orphanages are usually beyond control of the U.S. agencies that make the placements.

Still, many prospective parents, not wanting the uncertainty of dealing with birth mothers, never even consider domestic adoption seriously. Adoptions from foreign countries are expected to approach 15,000 this year.

Even so, the supply in foreign countries now exceeds the demand here. Susan Soon-Keum Cox, director of public policy at Holt International Children's Services in Eugene, Ore., said the increase came largely from Eastern Europe and China. Russia, which had no program five years ago, placed more children last year than any other country, Ms. Cox said.

''As recently as five or ten years ago, there were many more parents waiting to adopt than there were children,'' said Ms. Cox, whose agency has placed more than 100,000 children. ''Now that's entirely turned around. We're searching for families.''

Barbara Irvin, state director of Family Adoption Consultants in Macedonia, Ohio, is uneasy about having more children than families waiting for placement. ''There are some real tensions now between the child focus and the consumer orientation, the human services model and the market forces,'' she said. ''Some families start looking for the cheapest, the fastest, the 'we promise you a child that meets your quote-unquote specifications in so many months.' Some of us who have been in the field for 20 years get worried about this shift.''

In Search of a Child

SUNDAY -- Adoption is no longer a secret process laden with stigmas.
TODAY -- Money plays a defining role in the desperate quest for a child.
TUESDAY -- By adoption, some families are redrawing racial boundaries.
ON THE WEB -- A forum and video clips from a meeting between an adoptive mother and a birth mother are available on The New York Times on the Web at: www.nytimes.com.