A neighbor gives me her Dds stuff and I give her DS's stuff. I'm giving less now as ds really wears out his stuff. Now I'm getting larger quantity but less that matches my style. I would feel bad going through it in front of my friends. I also like to weed through it before dd sees it as the girls is now wearing tween brands. I pass along a lot of dds stuff to someone who does not have much. Typically high quality stuff as I have given up,bothering to sell anything these days. From time to time I get thank you notes. Nice but not needed. They go to a girl who is a relative of someone connected to the local coffee shop so the owner often gives me a free coffee to thank me for my business and passing the hand me downs to her friend's niece.
I think having the person go through it in front of you could lead to more confusion, misunderstanding. She may take less feeling that you have someone else you also want to give the hand me downs to etc. I would just tell her you happy to find a home for the clothes that you no longer need and though her thanks yous are appreciated they are not necessary and leave it at that.