We did this at a conference in NY and as the jello poured off the table in the beginning midwives class one student fainted. We figured midwifery might not be the calling for her. Having been in charge of props for a Halloween Horror Hayride for 2 years, I have done a lot of experimenting with recipes for fake blood. The one that has come the closest to realism for me is cornstarch cooked with water for the right consistency, and tempera for color. As I recall, it was about 1 cup of cornstarch for 1 gallon of water, you'll have to adjust this.
Powdered tempera is good as the coloring agent because it has some opacity.
Red tempera with just a touch of blue is about right for color. Be forewarned that this does stain. Best plan is to make it a little thick and add water to adjust after it has cooled. If you don't have to make large amounts, gelatin and water cooked together with tempera for color works, but you need to keep stirring it often to keep tempera from precipitating out. If you live in a rural area, you may be able to get cow or pig blood from a local farmer when he's slaughtering an animal.