The inability to be a 501(c)3 seems far from obvious, and a lawyer specializing in this should absolutely be consulted! See, for example, why Labor Unions don’t qualify, and consider the possibility of organizing as a 501(c)4, which can sometimes qualify parts of the contribution for tax deductibility. (And if the “insurance fund” is capped in size, the portion reserved can decline over time, eventually making ~100% into a tax-deductible donation.)
But doing that will require starting up and getting some seed funds, so obviously it won’t be resolved yet.
FWIW, in case helpful for anyone to know, I am pretty sure that in the UK this wouldn’t be eligible for gift aid (the tax relief system for charitable donations) as gift aid cannot be claimed if the donor is receiving a benefit and this would count as a benefit. Capping the size of the “insurance fund” would not solve this (or at least not with any simple system I can think off).
The inability to be a 501(c)3 seems far from obvious, and a lawyer specializing in this should absolutely be consulted! See, for example, why Labor Unions don’t qualify, and consider the possibility of organizing as a 501(c)4, which can sometimes qualify parts of the contribution for tax deductibility. (And if the “insurance fund” is capped in size, the portion reserved can decline over time, eventually making ~100% into a tax-deductible donation.)
But doing that will require starting up and getting some seed funds, so obviously it won’t be resolved yet.
FWIW, in case helpful for anyone to know, I am pretty sure that in the UK this wouldn’t be eligible for gift aid (the tax relief system for charitable donations) as gift aid cannot be claimed if the donor is receiving a benefit and this would count as a benefit. Capping the size of the “insurance fund” would not solve this (or at least not with any simple system I can think off).
I agree with what you said.
Based on how much some EAs seem to give, the OP’s project seems really good.
Money is the most fungible thing there is.