That doesn't mean it has to be the case here. But at first glance a DOA seems more like a detriment here (police can outspend citizens) and NFTs are NFTs, no explanation needed I suspect. Suggestion 3 might have merit, but storing the data in the blockchain (instead of just some hashes for timestamping) makes it look like some overambitious vanity project again.
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I think the basic idea is that this web3 crypto stuff is pretty scammy. It would be like finding out the not-for-profit you were thinking about working with also sells timeshares - maybe it is, against all odds, legit, but still not a good look and kind of a red flag.
Another take on it is - if I want to volunteer at a place I don't expect to get paid. If I'm working for payment, I don't want my payment to be in NFTs. So, the web3 intrusion into this idea is unnecessary and doesn't fit for either volunteers or employees.