Sorry, I missed this comment of yours. Many thanks for replying.

Maybe I misunderstand here, but if the donator is donating directly to a project, why would they be bothered when a working circles tries to say 'no' for some reason? Wouldn't they just donate anyway?

The donator/giving party would not assign his donation to a specific project but to the foundation as a whole. Through the set of working-circles and rules the foundation decides where the funds should go. The final step is transferring the funds. At this final step the giving party/donator and the trustees circle jointly transfer the funds. (In writing this, I realise we need a different rule if we are dealing with many small donations.)

I'm not 100% sure what you mean by 'multi-sig' - does that mean that the money can't be moved unless both parties agree and sign? What happens if there is a dispute and the donator can't get it back?

Yes, multi-sig is a technical means requiring signature of multiple parties. Concerning dispute, I'd suggest to apply a (new) rule, quite similar to rule no 1:

In case of a dispute a mediation process is initiated, which in the worst case leads to a voting process amongst the members of all active working circles how to decide.
If a malicious actor decides to run away, taking his keys with him, this is a problem which cannot be solved within the foundation. What would you think of a KYC-process for members of the trustees working circle?

This sounds like anyone with 2000SP can just take that position.. What happens if 10 groups all want that position?

If ten groups want the position, there will be a very healthy competition concerning aproval of the other working circles. But you're right, we should have a general rule for unforeseen cases putting in place a voting procedure for decisions.

aren't the trustee group and initial founding members the ones who ultimately decide which working groups get established?

The initial working circles will be voted on by the community. I thought, this had been written down somewhere....This has to be clarified for the final proposal.