Sandberg is donating her entire stake in SurveyMonkey to charity, in the shape of shares or the proceeds of sales of those shares. The Facebook COO and SurveyMonkey board member has embraced the Giving Pledge.
You don’t have to give away millions, or billions, to be philanthropic. In fact, if you are a regular donor to charities, you may want to give some thought to creating a donor-advised fund. CNBC’s article, ““What you can learn from Sheryl Sandberg's plans to donate her SurveyMonkey shares,” explains how donor advised funds work and how donating appreciated assets benefits investors at all asset levels.
Sandberg 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. Her charitable plans are part of her strategy 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 already donated Facebook shares to charity through a donor-advised fund.
Many people experience satisfaction in giving during life, and Sandberg’s actions are a good lesson in charitable giving. Giving appreciated investments to charity is a wise strategy. However, there are some things to consider before you do this.
The tax savings from charitable giving can be significant, but that shouldn’t be your sole rationale for giving. The reason is that you’ll still be parting with more money than the tax itself. Don't write a large check for charitable purposes without reviewing it with your attorney. In many cases, she can increase the value and benefit of the gift at no cost to the charity. If you plan to give money away to charity on a regular basis, you may want to think about a donor-advised fund.
A donor-advised fund allows you to monitor your charitable donations, because the money comes from one fund. The IRS lets you take a tax deduction in the year you give to your donor-advised fund. You then can let the money sit in your account until you decide that you are ready to donate it. Donor-advised funds also let a person shield their gifts from the public.
People who have multi-millions in assets can also create a private foundation for their giving strategy. The cost of setting up and managing a foundation is prohibitive for anyone but the wealthiest individuals or families. The foundation has to file a tax return every year, and usually requires the help of an attorney to set up. For families with that kind of money, the foundation provides a larger degree of control, and their gifts are public, not private, in nature.
Reference: CNBC (October 4, 2018) “What you can learn from Sheryl Sandberg's plans to donate her SurveyMonkey shares”