Nonprofit Adoption Agency Shuts Doors without Warning

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February 9, 2017; WCIV-TV (Mount Pleasant, SC)

Hundreds of couples and individuals across the country who spent thousands of dollars each trying to adopt from the nonprofit Independent Adoption Center (IAC) now must look somewhere else to start or enlarge their families.

The IAC emailed letters to clients on January 31st that affirmed they were shutting their doors immediately. The email said the “climate of adoption” had changed recently and it was more difficult to find birth parents and good adoptive parents.

John Mooney and Chris Lacey were one of the heartbroken potential adoptive couples. “It was shocking to us,” Mooney said. Although the couple hopes to recoup some of the $16,000 they lost in bankruptcy court, they assert the biggest loss is coming away from the process without a baby.

Just Google “Independent Adoption Center” and dozens of similar stories pop up from various news outlets covering broken-hearted soon-to-be parents over the last week. And all of them say they had no warning. One even signed up for the first time four days before IAC permanently closed.

And it’s not just the adoptive parents, but the birth mothers who are affected. According to Lacey, birth mothers were supposed to receive lifelong counseling after the process. This could not be verified by IAC as the website has been completely dismantled except for news of its closing, including the letter sent to clients.

It does appear, however, there is some truth to IAC’s statement that the climate of adoption has changed. National Council for Adoption CEO Chuck Johnson says the rise of the Internet makes it easier to secure adoptions without an agency. “There have been a substantial number of closings in the last 10 years,” he said.

The IAC reported total liabilities of $649,904.55 and total property valued at $57,012.45 in their Chapter 7 bankruptcy claim filed in Northern California. Their 2014 Form 990, however, doesn’t appear to show distress, leaving many of their clients perplexed as to how things could change so drastically in just a couple years.

In fact, at the end of 2014, their net revenue for the year was $438,325 and net assets were $2,262,074. The executive director at the time seemed to make a reasonable salary for such a large organization ($154,622). Program service revenue even increased by almost a million dollars from 2013 to 2014 ($5.6 million to $6.5 million). Alas, 990s can’t possibly tell the complete picture, but it doesn’t save families from wondering what financial struggles the IAC was going through to close so abruptly and without notice.

Regardless, nonprofit bankruptcy is real, but different than a for-profit bankruptcy. And boards of directors must still be upheld to their fiduciary duties throughout the process. For more information on the difference between a nonprofit bankruptcy and for-profit bankruptcy, check out this article.—Angie Wierzbicki