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This is a good question. Here is a break down of the sentence.
"Sally" is the subject of the sentence. This should be clear, because Sally is the one who is doing the action. The action is "gives," which means this is the verb of the sentence.
The word "practicing" is the gerund of the sentence. More specifically, "practicing" is the object of the verb. Usually the object of the verb is a noun, but occasionally it possesses a verbal notion. When the object of a verb has a verbal notion, then it is made into a noun by making it into a gerund. This is the case here.
Finally, as the gerund has a verbal notion, it can take an object. The object of the gerund is "figure skating."
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