Is it still possible to create 5% more coins for foundation or deflate the current coin supply to 95% and leave 5% for the foundation?
No. Re-read the terms of the sale if you don't see that.
Then donation is the only way for the foundation to get the 5% to start with.
OK, guys, we have only two options:
1) donate at least 5% when you claim your coins for the foundation and the foundation can be created and founded and have the minimum resources to start to work and function. it is important to do the donation during your claiming coins because if you don't do it during the claiming process it will almost impossible for you to do it (donating 5% or more) in the future when the coins are on the market/exchanges and when you can sell your coins easily. It is just human nature. (I don't mean there aren't exceptions, but let's just think about the average here. The exceptions won't cover the average).
2) not donate or donate less than 5% when you claim you coin and the foundation won't be created and no one with the necessary tech and industry knowledge will work on the development and promotion of iota in the future and iota will become oblivious quickly just like nxt and crypti, maybe even worse.