Commonly used terms at Ribbon
Accrual (based accounting): Recording of revenue or expenses when the transactions occur regardless of if money is received or paid out. (See "Cash" for alternative)
ACH (Automatic Clearing House): The primary system that agencies use for electronic transfers.
Activity: List of transactions on internal and external accounts connected to Ribbon.
Allocation: The assignment of funds in a sponsor’s connected bank account to a sponsored program’s ledger. This can be done so that the program sees the allocation as a deposit, a donation tied to a donor and receipt, or as an expense.
- Transactional Allocation - Assigning a specific bank transaction to a program
- Free-Form Allocation - Assigning an amount, not a specific transaction, to a program
Bill pay: A payment requested by a program to a vendor of the program. When approved by the sponsor, a digital payment is sent to the vendor, and a bank transfer is made out of the chosen connected account to fulfill the digital payment.
Cash (based accounting): Recording of revenue or expenses when actual payment or expenses are received or reimbursed. (see "Accrual" for alternative)
Deposit: Any money into a program’s available balance that isn’t associated with a donor/donation receipt. Deposits typically come in through a virtual account number or an allocation. These can also come through an invoice created by the sponsor using the “Add Funds” option in program Account Settings.
Digital Payment: Digital “check” payment emailed to vendors and recipients for all Bill Pay and Reimbursement payments.
Donation: Encompasses all incoming funds from donors through giving forms, campaign pages, and donation request invoices. Can also be created from a sponsor-added allocation. All donations create a tax-deductible receipt on Ribbon.
Expense: Covers all outgoing funds for expenditures, including payments made with Ribbon spend cards, as well as approved Bill Pay and Reimbursement requests. Can also be created from a sponsor-added allocation.
Fiscal Sponsorship Models:
Model A: The fiscal sponsor accepts donations on the project’s behalf, retains control over funds, and is responsible for reporting and compliance. The project may have staff that work under the fiscal sponsor as staff.
Model B: The fiscal sponsor accepts donations on the project’s behalf, distributes funds, and is responsible for reporting and compliance. Project staff are independent contractors doing work on behalf of the project.
Model C: The fiscal sponsor accepts donations on the project’s behalf, distributes funds, and is responsible for reporting and compliance. Funds are distributed to outside entities, typically in bulk, based on terms in the contract.
Model L: In this model, a single-member LLC is the sponsee and is treated as part of the sponsor for tax purposes. The sponsee can receive tax-deductible contributions and grants in its own name.
General Ledger (GL) Code: A unique identification code that allows sponsors and programs to classify and track financial activity. Used to track funds associated with a budget for reporting.
Merchant Codes: Visa Merchant codes - exhaustive list automatically assigned for spending card transactions.
Program: An individual or organization doing charitable work under a fiscal sponsor that does not typically have tax exempt status of its own. Also known as a “sponsee”. Sponsors may also call them “projects”.
Program Gross Balance: The total of all cleared and allocated donations and deposits minus all paid expenses across all sponsor accounts.
Program Net Balance: The available balance to the program to spend in Ribbon. This is the Gross Balance minus sponsorship fees and processing fees.
Reimbursement: A repayment to a project team member that spent personal funds on behalf of the project.
Revenue Percent/Donation Revenue: The percent fees charged per donation that are allocated to Ribbon and/or the sponsor.
Ribbon Issuing: Ribbon account for Sponsors and their programs to receive online donations and deposits and make payments via spend cards. Funds can be transferred between the Ribbon issuing account and the sponsor's bank account as needed.
Ribbon Monthly Subscription: The cost per program charged to the sponsor by Ribbon. This cost is on a sliding scale depending on the number of programs on the platform. The more programs the less the monthly fee.
Sponsor: An organization with tax exempt 501c(3) status that hosts charitable projects under its IRS status.
Sponsor Bank Account: Account at an external bank that is linked to Ribbon to enable financial transactions within the tool.
Sponsor Balance in Banking Overview: The difference between the current connected account’s balance and the allocated program funds that Ribbon is tracking. These are funds either belonging to the sponsor or unallocated funds belonging to projects.
Sponsorship Fees: What sponsors charge programs for the sponsorship. Typically a percent of funds received as they come into the Ribbon platform. Can include or be a flat monthly price.
Stripe: A payment service provider that lets merchants accept credit and debit cards or other payments.
Transaction: Any movement of funds from any source internal or external.
Transfer: Any movement of funds from one account to another.
Transfer Rebalance: Updating the program allocation on funds moved between Sponsor’s external accounts without showing the activity on program accounts or charging fees. Typically done between an investment account and the operating account (checking).
Unallocated: Funds or transactions in Sponsor’s connected bank accounts that have not been allocated to a program on Ribbon.