Ven. Dhammika has a post that gives some background on these offerings:
Brahmanism at the time of the Buddha taught several contrasting, even conflicting ideas about what happens to a person after they die; that they go to heaven, that they are dispersed among the elements, that they become plants or that they join their ancestors, the fathers ( pitamaha ), in some kind of shadowy afterlife. All these notions are mentioned in the Vedas. The last of them was probably the most widely accepted as it is the one mentioned most frequently in the Tipitaka. During the Buddha’s time there seems to have been only the beginning of an idea that one’s postmortem state, whatever it might be, was determined by one’s moral or immoral behavior while alive. Everyone, it was assumed, went to the world of the fathers. Some days after the funeral the oldest son, directed by a brahman, performed a ceremony called the sraddha (Pali saddha , A.V,273; D.I,97) in which small balls of dough ( pinda ) and other food were offered to the departed person as this invocation was made: ‘May this offering benefit our ancestors who are dead and gone. May our ancestors dead and gone enjoy this offering.’(A.V,269). The belief was that this food would be received by the departed and help to sustain them. Gifts were then given to the brahmans directing the ceremony. Only a son could perform the saddha rite, which was one of the main reasons people so strongly desired to have a son (A.III,43). Performing this ceremony was one of ‘the five offerings’ ( pancabalim ) every person was expected to make (A.II,68). Evidence of the enduring nature of Indian spirituality is that this ceremony, little changed, is still done today by Hindus. If you visit the Vishnupada Temple in Gaya you can see this ceremony being done. In the last decade or so Hindu pilgrims have started doing it at Bodh Gaya.
The balī is one of the five daily sacrifices (yajña) to be performed by a householder. It consists of a portion of the daily meal (rice, grain, ghee etc) to all creatures, and is usually performed by throwing the offering up into the air near the main door before consuming the meal. Such practices are not accepted in the Buddha‟s teachings. The Buddha instead secularized them to become more meaningful social or religious acts.
Thank you for these explanations. This mainly seems to cover the “ancestors” part of the five recipients of this donation. Maybe at some point the term has just been generalized to include the other four?
You are right that bali is not quite clear, and why spirit-offering where ‘offering’ would maybe suffice. Sanskrit bali is surely an ‘offering’ but, as you mentioned, can for example also be a tax.
Actually we don’t have pañcabali in Sanskrit. Here the term for the five-fold daily ritual is mahāyajña. And it is not an ancient custom, actually this term mahāyajña signifies in older literature an unrelated soma ritual. Only in texts at most contemporary to the Buddha and later, in the Grhya- and Dharmasutras, it comes to mean the five daily rituals. Also they are slightly different than in the suttas. The five are offering to beings (bhūtayajña), to men (manuṣyayajña), to the Forefathers (pitṛyajña), to the gods (devayajña), and to Brahman (brahmayajña).
The brahmayajña could be the ‘guest-offering’ since one interpretation says that it should be given to a Brahmin.
