Bridging the Gap

The best ideas are often the simplest. We focus on using complex technology and forget the power of human interactions. – Bill Raker, CEO of Firefly Credit Union

In 1854, it was estimated that more than 30,000 abandoned children were living on the streets of New York City. That year, a movement to find these children, and others from large cities, a home was born. Its name: The Orphan Train.

The aptly named Orphan Train brought orphans cross-country, primarily to the Midwest. The most notable stop, as featured in books and plays, is the state of Minnesota. To this day children of the Orphan Train who were adopted by Minnesota families still gather annually to remember this important catalyst in their lives.

With this history, it’s no wonder that the state of Minnesota is consistently first in the nation in adoptions per capita. Given this statistic, it makes sense that a local Minnesota credit union, like Firefly, would lead the way for a nation-wide, pro-family adoption loan that breaks down today’s biggest barrier for families - the expense.

Today a staggering 107,918 foster children are awaiting adoption in the U.S. alone, with more than 20,000 aging out of foster care without being placed in a permanent home. The problem is drastic and according to two Minnesota adoption agencies, the biggest reason is a lack of funds to cover the costs of the adoption process. This massive gap between potential adoptive families and waiting children, is a great opportunity to remind the nation why the credit union movement is so special. The credit union philosophy is “people helping people” and that is the foundation of this loan.

What if credit unions in communities across the nation used Firefly's easily replicated adoption loan model to serve families in their community? Research suggests such loans would be a win for all involved: credit unions would increase their membership base with responsible, well vetted borrowers with substantial incomes; potential adoptive families would get funds to cover their home study, legal, travel and placement fees; and orphaned children looking for their forever home can find their forever family.

This idea has been well received with those I’ve shared it with; however, I recognize there are skeptics with concerns. Their questions, with my answers, are below: 

What is the need?
Adoptions are expensive, in some cases exceeding $40,000. While millions of families consider adoption, agencies will tell you, the number one reason families do not follow through is: “MONEY!”

Who are the borrowers?
Potential adoptive families are well vetted borrowers often with substantial incomes. Families who adopted from Minnesota’s two largest adoption agencies had an average annual income of $185,000 for domestic adoptions and $145,000 for international adoptions. While they make enough to live comfortably, they often do not have an additional $40,000 to offer up front.      

How does this benefit credit unions?
This is an opportunity for credit unions to tell our story, we are not all about loans and deposits, we are about people and families! This loan is easy to promote through public relations campaigns and partnerships with adoption agencies. Plus, it will enhance membership bases with stable and wealthy individuals, looking for advocates in their adoption process.

 Will this be a good idea that loses money?
No. Although the logistics of this loan are still in the works, the data we have gathered shows the loans themselves will not just be a public relations boon, they will also be profitable. Furthermore, it is likely that families looking to adopt will take out a Home Equity Loan or another product to prepare for the adoption.

I’m not proposing the rebirth of the Orphan Train, because although the problem today is much bigger, I believe the solution is much simpler - a loan product that works to bridge the gap between children waiting for homes and parents wanting to adopt. Through easing the financial barrier of adoption and giving families the opportunity to grow, this idea is the true meaning of the credit union philosophy.

Geoff Bullock