The Plan

As most of you know, the Plan was posted earlier this week. I've had a number of queries asking what I think about it, so here it is. But first, a bit of background - My file went to Ethiopia on June 23, 2009 so, of the 229 families of Imagine Adoption whose files are currently sitting in Ethiopia waiting for referrals, I'm about as far down the list as you can get. The Plan, in a nutshell, is that new management will step in, a new Board will step up, and an Advisory Committee, which includes yours truly, will chip in when requested/required. An additional $4,000 per family will have to be paid - $2,000 now and $2,000 in the New Year once operations have been commenced and stabilized and a determination made that the restructuring plan is, in fact, viable. Referrals are scheduled to start again early in 2010, but reasonable expectations are that this will happen earlier.

As a parent at the bottom of the referral list, I needed to get comfortable that the Plan presented a reasonable opportunity to keep the agency viable for at least 3 years, without the need for my further financial input. By putting in $4,000 now, I need to be reasonably certain that in 2 years, I don't get another cash call. Because by the time that cash call comes, if half the families have brought home their kids, that's not going to be a $4,000 cash call, it's going to $5,000 or $8,000 or $10,000. In other words, if the Plan doesn't keep the organization operating, more fees will have to be paid by the remaining families to wrap up their files. For that reason, the team that created the Plan made sure to include 3 years of cash flow statements. In doing so, the assumptions presented with the Plan are crystal clear that the agency has to be viable as an ongoing business in order for it to be successful.

The Plan is not perfect. It provides no guarantees. It is risky. There will be an operating deficit again after only one year in operation, despite the additional family contributions. The agency will be micromanaging its costs for the next few years. Despite this, the Plan is not destined to fail. Success requires that parents vote yes at the creditors meeting on September 21st and pay their first $2,000. Success also depends upon those parents whose files are not yet in Ethiopia paying their remaining agency fees (if any) in 2011 and upon the agency being able to continue operations by accepting new clients in 2011. If any of these things fail to happen, there is little doubt that the agency will re-enter bankruptcy within the next couple of years. If this happens, depending on at what stage it fails, some parents may well have been able to bring home their children, while others (including me) will be unable to do so. If that doesn't sound bad enough, notwithstanding that our relationship with MOWA is apparently stable, our orphanages have not been paid since bankruptcy was declared. Failure to maintain and mend those relationships quickly could be the end of this agency.

This all sounds very dire, but the reality is, this is a start up business now, with start up risks similar to those of any other new business. The Plan itself clearly states the assumptions (conservative) that are being made so that affected parents can make informed decisions about whether this will be a viable business, warts and all.

The $4,000 being paid by each family will not cover all the operational costs of the agency for three years. This amount was merely arrived at because that was the sum that seemed to reflect what parents could reasonably pay in order to keep as many families in the program as possible and realize their adoption dreams, while recognizing that money would have to come from elsewhere to supplement those funds. That includes fundraising and it includes new clients. There are no guarantees, and there is no question that the plan will have to be modified and updated as time goes by, operations get under way, and circumstances become clearer.

Nonetheless, I support this Plan, and I have voted yes. I will contribute whatever time and expertise I have to get this agency back up and running and turn it into a success we can all be proud of. And I hope that in the next two years I'm able to describe "The Call" that heralds the arrival of Daughter #2. Please wish us luck for September 21st and thereafter.