Adopting a child is a great mitzva of chesed toward the adopted child, whether or not it also benefits the adopting family. There is no contradiction between the two. Let us cite the Talmudic source that lauds adoption. The gemara[1] tries to identify the subject of the following pasuk in Tehillim:[2] “Praiseworthy are those who … do acts of charity at all times.” Who is capable of doing charity at all times? The first opinion is that it is one who raises and supports his own children. The second opinion is that it is one who raises orphans in his home and marries them off. One can use the first opinion to understand the second. Supporting one’s own children is certainly a natural thing, which usually includes a significant degree of self-fulfillment. This is not the type of charity reserved for the very pious. Nevertheless, it is still considered a great act of charity. So too, the praise for families who adopt applies even to those who pine for children. On the contrary, if family members prefer not having more children and consider adoption simply out of pity, they should weigh carefully whether they will be capable of seeing the responsibility through, with the necessary self-sacrifice, love, and patience.
All indications are that the laws of kedimut (giving precedence to one recipient over others) apply throughout the laws of chesed. The concept that one gives precedence to those closest to him is hinted in the Torah in the laws of lending.[3] Despite this fact, the Rambam[4] lists the details specifically in the laws of tzedaka and omits them in the laws of lending. Commentaries explain that once it is found in one case, it is assumed in the other.[5] The Chofetz Chayim, in the introduction to his classic work on the laws of chesed, Ahavat Chesed, stresses that all of the different forms of chesed share the same underpinnings. Therefore, it appears that there is reason to give precedence to those closest to the adopting family. This would mean adopting Jews before non-Jews, relatives before non-relatives, and neighbors and people from the same city before others.[6] (There are halachic considerations regarding the preference of adopting a Jewish child or converting a non-Jewish child that are not appropriate in this forum and should be discussed with one’s personal rabbi if the question arises.)
As far as who is considered a member of the same city, there is a machloket among the Rishonim. Rav Yitzchak ben Rav Baruch rules that whoever comes to the city is considered in the category of a preferred recipient, whereas the Tur[7] says that only those who are permanent residents of the city are included. The Rama[8] rules like the Tur. However, if a child has moved into a local orphanage on an ongoing basis, he should be considered a local regardless of his place of origin.[9]
The question, though, is to what extent the laws of precedence are binding here. Firstly, even with regard to relatives vs. non-relatives, which is the most serious case,[10] the issue of whom to help is not nearly as crucial as the mitzva itself to give the tzedaka.[11] Furthermore, since it is rare for a specific person to have a personal obligation to adopt a child, if he does volunteer, he can do so according to the factors that are important to him.[12] These factors may include cost, reliability of an agency, etc. If one can incorporate the rules of precedence, that is commendable, but the important thing is to succeed in carrying out the tremendous chesed to the benefit of all involved.