What you can learn from Sheryl Sandberg's plans to donate her SurveyMonkey shares

  • SurveyMonkey board member Sheryl Sandberg plans to donate her stake in the company to charity as part of her commitment to the Giving Pledge.
  • Donating appreciated assets is a strategy that can benefit all investors, regardless of your level of wealth.
  • Individuals who give to charity regularly may want to consider setting up a donor-advised fund and check how tax rules affect giving strategies.

SurveyMonkey's public market debut also revealed what board member Sheryl Sandberg plans to do with her ownership of the company.

Sandberg, who is a member of the company's board and the chief operating officer at Facebook, plans to donate all of the shares she owns, or the proceeds of the sale of those shares, to the Sheryl Sandberg & Dave Goldberg Family Foundation, according to the company's IPO prospectus.

Sheryl Sandberg and husband David Goldberg in 2013.
Getty Images
Sheryl Sandberg and husband David Goldberg in 2013.

Sandberg's late husband, Dave Goldberg, was the CEO of SurveyMonkey.

SurveyMonkey's prospectus lists Sandberg's ownership of the company through a revocable trust as 10.3 million shares, or 8.4 percent of the company after the offering.

Sandberg's charitable plans are part of her plans to participate in the Giving Pledge, whereby some of the world's wealthiest individuals, including Warren Buffett and Bill Gates, have agreed to give most of their wealth to charity.

Sandberg has previously donated Facebook shares to charity through a donor-advised fund, according to public filings.

The SurveyMonkey donation is in keeping with the spirit of what Sandberg has written and shared following her husband's death, said Charlie Douglas, an estate-planning expert who runs a family office.

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That includes the one-line prayer a childhood friend shared with Sandberg in the wake of Goldberg's death: "Let me not die while I am still alive."

"There's a joy in giving during life that you're obviously not going to experience if you wait to give it away when you die," Douglas said.

The strategy that Sandberg is using is one that all investors can learn from, according to experts in charitable giving.

"Giving appreciated investments to charity is a very, very smart strategy," said Kim Laughton, president of Schwab Charitable.

But there are a few things to think about before you take a cue from Sandberg.

Think before you pull out your checkbook

The tax savings from charitable giving can be massive, but that should not be your only motivation for giving, said David Karp, co-founder of PagnatoKarp.

That is because you will still be parting with more money than the tax itself.

One piece of advice Karp always gives his clients: Never give cash.

If you want to give $1,000 to charity, for example, you would have to sell around $1,300 worth of stock to get to that $1,000 sum after taxes. Or you could give the assets directly to the charity. That way, the stock is worth $1,000 both to you and the charity.

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"I tell people, 'Please don't ever write a check for charitable purposes without us talking first,'" Karp said. "I can actually increase the value and benefit of your gift at no cost to the charity whatsoever."

Also keep in mind that an appreciated asset does not necessarily have to be publicly traded stock, said Karla Valas, head of advanced planning at Fidelity Charitable.

Entrepreneurs and other individuals who have interests in privately held businesses that have appreciated can give those away, too, she said.

Consider a donor-advised fund

If you plan to give money away to charity on an ongoing basis, you may want to consider opening a donor-advised fund.

These funds are typically offered by local community foundations, according to Douglas, or firms such as Schwab or Fidelity Charitable. Both of those firms have a $5,000 minimum to open a donor-advised fund.

Donor-advised funds let you keep track of all of your charitable donations, because all the money comes from one place.

You can take a tax deduction in the year you give to your donor-advised fund. Then you can let the money stay in your account until you decide when and where to donate it.

"Donor-advised funds are never a bad idea, but if you know who you're going to give to and when, it's sometimes easier just to go direct." -David Karp, co-founder of PagnatoKarp

Donor-advised funds are great vehicles for someone who wants to make a meaningful charitable donation in a given year but are not sure who they want to give it to, Karp said.

"Donor-advised funds are never a bad idea, but if you know who you're going to give to and when, it's sometimes easier just to go direct," Karp said.

Know that foundations are different

Private foundations are a different type of endowed-giving vehicle that usually make sense for individuals with larger amounts of money.

Most people will not open a foundation for less than several million dollars, Laughton said.

Foundations need to be set up with an attorney, and tax returns have to be filed every year.

Setting up a foundation enables you to set up scholarship grants and employ family members, Laughton said.

"They tend to be used by larger donors who want that level of control and are willing to have all of their granting done publicly," Laughton said.

Donor-advised funds, in contrast, allow donors to keep their gifts from the public.

Keep the new tax law in mind

The Tax Cuts and Jobs Act that goes into effect this tax year nearly doubles the standard deduction.

That means it will be tougher to reach a point where you can itemize and take a deduction for your charitable gift.

Donor-advised funds can help individuals who do not quite reach the level where they can itemize, Laughton said.

By giving a large sum to a donor-advised fund, you can itemize and take a tax deduction in the year you put the money in the fund. Then you can spread your donations over several years to the charities you support.

"They're getting the best of both worlds," Laughton said, "both taking the standard deduction when it makes sense but also itemizing every few years to ensure they get the full tax benefit of their charitable giving."