I agree with you. I think taking from existing inflation is better than creating more inflation. I would push for a little higher than 10%. Maybe around 20%, pushing posting rewards to 55%. Witness and interest payments shouldn't be reduced.
Gauging from responses in this post. Using existing inflation appears to be the preferred option.
Donations would be great but they are less of a guarantee. Beneficiary rewards are another way of adding to the fund. An initiative similar to what @steem-plus are doing could help.