Legal terms are often used to obfuscate rather than clarify. Like most jargon, they're useful primarily to insiders.
But one common piece of legalese -- quid pro quo -- is easy to explain, and it's commonly used in non-legal settings. Read on to learn more about the origins, uses, and examples of quid pro quo.
Hannibal Lecter: Quid pro quo. I tell you things; you tell me things. Not about this case, though, about yourself. Quid pro quo. Yes or no? Yes or no, Clarice? Poor little Catherine is waiting.
Clarice Starling: Go, doctor.
Of course, relatively few examples of quid pro quo involve an FBI agent attempting to obtain information from a prolific serial killer/cannibal.
Start-Up
In business, quid pro quo can be a bartering arrangement, especially common among startups with little cash flow -- for example, a donation to a nonprofit that results in anything from a bumper sticker to the promise of future services or a networking exchange where one person offers something of value to another in exchange for future services or benefits.
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Quid pro quo example
The IRS uses an example as mundane as a $100 donation to charity as an example of a legitimate quid pro quo. If a donor made a $100 contribution to a non-profit and received a concert ticket worth $40, the donor would have made a quid pro quo contribution.
Because it's the IRS, however, it's not that simple. The organization would then need to provide a disclosure statement to the donor since the quid pro quo is more than $75 (even though the charitable contribution amounts to only $60 after the cost of the ticket is considered).
The disclosure statement would need to provide the donor with the deductible amount of the contribution and a good faith estimate of the fair market value of the item received as part of the quid pro quo (in this case, the concert ticket).
A disclosure statement for the quid pro quo isn't required if the item or services given to a donor have "insubstantial value," generally considered to be 2% of the payment or $50, whichever is less. A statement also isn't needed if there's no "donative element." For example, an item purchased at a non-profit museum's gift shop wouldn't require paperwork. Likewise, intangible religious benefits, such as payment for admission to a religious ceremony or annual membership benefits of $75 or less, don't require statements for a quid pro quo.
