Richie was born in Berkeley, California, and has Mexican, English, and African-American ancestry. Her biological father is Peter Michael Escovedo, who is the brother of Sheila E, and her biological mother is Karen Moss. When she was three years old, her biological parents agreed to let her move in with Lionel Richie because they could not afford to provide for her financially. "My parents were friends with Lionel," she told People in 2003. "They trusted that they would be better able to provide for me." Initially, Lionel Richie became her guardian.

From her Wikipedia page.

Then Richie’s wife Brenda, who had been hungering for a child, suggested adopting Nicole. “Lionel ... would do anything to keep Brenda happy,” Escovedo writes.

The Richies convinced Peter and Karen to give up their child.

“The hearbreaking part is that once Nicole Escovedo legally became Nicole Richie, it felt like we lost her. We all lost her,” says Escovedo.

From this article about Sheila E., brother of Peter Michael Escovedo, Nicole Richie's biological father.

Poor Little Richie Girl; Nicole Richie, Adopted Daughter of Singer Lionel, Stars with Heiress Paris Hilton in the Hit Reality-TV Show the Simple Life. in an Exclusive Interview, She Tells Caroline Graham Intimate Details About: * Paris Hilton's Sex Video Scandal * Sleeping over at Neverland with Her Godfather, Michael Jackson * Finding the Birth Parents Who Gave Her Up for Adoption

Title of this article, which unfortunately requires a subscription to see the relevant parts about her adoption.

There's also the People magazine article quoted in the first link, but I can't actually get that article to load anywhere.

I really thought this was common knowledge at this point.