This is going to be a huge pain for the 600 groups that this affects (few of which are open source projects - this is NOT the part of Open Collective that handles open source).

The key thing to understand here is what a "fiscal sponsor" is in the US charitable world.

If you want to accept charitable donations from people in the US you really need special tax status with the IRS. This involves a lot of bureaucracy and paperwork.

Or... you can find an existing 501(c)(3) that is willing to be your "fiscal sponsor". They handle the IRS paperwork and do things like provide a bank account for the donations to go into and make sure you are behaving correctly and legally.

They will generally do this for you because your cause matches with their mission - plus they usually get a small portion of your donations to help cover their costs (lots of accounting and legal work).

Once you've set that relationship up everything becomes massively easier for you... unless your fiscal sponsor dissolves itself, at which point you have to unwind that relationship and kick up a new one with someone else!

I learned about this because the Python Software Foundation occasionally acts as a fiscal sponsor.