The paid internship: the internee's parents pay

I recently wrote about the unpaid internships. The newest twist is where parents bid for internships for their children at charity auctions, as explained in a Wall Street Journal article:

In the competitive world of summer internships, a new route to plum spots is emerging: buying them at auctions, often at elite private schools. This spring, internships at Morgan Stanley, NBC, Miramax, WebMD, Electronic Arts and a host of other companies have been put out to bid at auctions across the country. Bids often reach into the $2,000 to $5,000 range. Some internships are unpaid; in other cases the winners' kids receive a salary.

Schools say internships have strong appeal at charity auctions with parents who see them as résumé builders for college applications. When a stint at investment bank Friedman, Billings, Ramsey went on the block at Georgetown Prep's spring auction, so many parents bid on it, the school immediately added a second position, for a total of $10,000, says spokesman for the North Bethesda, Md., school. Companies say they view these internships as charitable contributions with a unique return: mentoring young talent from top schools.

This also demonstrates how a great deal of “charity” is not about charity at all but is really a status building and social activity for rich people. This why I'm opposed to the policy of giving income tax breaks for "charitable" giving.

Comments

[nancyspungenesq]

By now, this should be no shock for jobs in journalism, the arts and entertainment. But, it's surprising to see that the pay-to-play epidemic has infiltrated the financial world.

I guess it makes sense, though, because if your parents can afford to buy you a Morgan Stanley internship, your parents can probably also get a lot of friends and relatives to put their investments with you at Morgan Stanley. Do non-wealthy people have any shot at making it as brokers nowadays?

Personally, I think charity runs on vanity, so thank goodness for it.

[michael vassar]

Your conclusion seems like a non-sequitor. If charity was not tax deductible wealthy people would only give proportionally less and government would distribute more taxes as it sees fit. As inefficient as private charity is, surely government is worse.
OTOH, making charity non-deductible might be a good policy as part of a massive simplification of the tax code.