154: It's Gravy, Baby! | What is a Nonprofit Audit? with Hannah Hugen

154: It's Gravy, Baby! | What is a Nonprofit Audit? with Hannah Hugen

Author: Jess Birken, MNM, JD December 24, 2025 Duration: 18:05

Think an audit is something to fear for your nonprofit? I get it! But what if it's actually a powerful tool for growth?

In this episode, I sit down with nonprofit auditor Hannah Hugen from Abdo to unpack what an audit really is and why it's not nearly as scary as it sounds.

Real Listener Question:

"We filed the 1023-EZ and said we'd stay under $50K… but now a funding opportunity would push us past that. Will the IRS audit us? Should we say no to the money?"

Hannah and I dig into what an audit actually involves, what the IRS does (and doesn't) care about, and how nonprofits can prepare for growth without panicking. We also talk through the "scary myths" that float around new organizations and the real steps you can take now to avoid future chaos. If you've ever wondered what auditors look for, how to document properly, or what GAAP even means, this conversation breaks it down in plain English.

What You'll Learn:

  • What a nonprofit audit actually is
  • When the IRS might look at your organization and why it's not as dramatic as rumors imply
  • How to show good-faith financial projections from your 1023-EZ
  • Why documentation habits will save your future self
  • The difference between cash and accrual accounting
  • Practical steps to get audit-ready even if you're small

Bottom line: You don't need to fear audits — you just need systems, clarity, and good habits. Your nonprofit deserves room to grow, and the right preparation makes that growth possible without being overwhelmed.

Resources from this Episode

Connect with Us

Listen & Engage

Stay Connected


Ever find yourself wishing for a direct line to seasoned nonprofit leaders, a chance to unpack the real challenges that don’t make it into the glossy annual reports? Charity Therapy is that conversation. With host Jess Birken, who brings her background as a lawyer and a Master of Nonprofit Management to the table, each session feels like pulling up a chair with a trusted advisor. The discussions move beyond theory, tackling the granular details of operations that leaders actually face-whether it’s navigating a tricky IRS compliance question, rebuilding a fundraising strategy from the ground up, or managing the complex interpersonal dynamics that define any mission-driven team. This podcast digs into the operational heart of the sector, offering pragmatic insights you can apply directly to your own work. It’s a resource built on the understanding that running a nonprofit is a continuous practice of problem-solving, and Jess guides these explorations with clarity and a deep respect for the work. Tune in for honest dialogue that treats the daily grind of management as the serious and nuanced craft that it is.
Author: Language: English Episodes: 100

Charity Therapy
Podcast Episodes
Let's Keep This Private [not-audio_url] [/not-audio_url]

Duration: 20:37
The nonprofit world throws out that "501(c)(3)" moniker left and right – but what does that really mean? The IRS doesn't always communicate in ways the average person can (or should!) understand. So let's break it down –…
Follow the Money [not-audio_url] [/not-audio_url]

Duration: 21:22
Just because your organization is striving to do good, thatdoesn'tmean you're exempt from having todeal with trolls and scammers. There's no scam exemption application you can file! So, what can YOU doto make sure the no…
It's Like an Onion [not-audio_url] [/not-audio_url]

Duration: 22:51
Executive committees – what should they really do anyway? Spoiler alert – not as much as you think! Some nonprofit boards have a nasty habit of relying on an executive committee to be the board within the board, and that…
TLDR: Y'all Need Protection! [not-audio_url] [/not-audio_url]

Duration: 23:07
You can't (and shouldn't!) envision every bad thing that might happen at a nonprofit. Nobody's got time for that! But you do need to be prepared and protected – and that means insurance! We're pulling this episode out of…
Periods of Baldness [not-audio_url] [/not-audio_url]

Duration: 19:32
There's this phrase "no man is an island." Well, guess what – no nonprofit is an island, either. In this episode, we're talking about the different ways people try to hack the board of directors and hoard all the control…
Making Ch-ch-ch-changes! [not-audio_url] [/not-audio_url]

Duration: 13:08
No one gets into nonprofit work because they LOVE all the paperwork, but that doesn't mean you're exempt from doing it (sorry!). There are some core documents that every nonprofit needs to keep up with – especially when…
Size Matters [not-audio_url] [/not-audio_url]

Duration: 20:29
Nonprofits need to have a board - but how is that board supposed to make decisions? Today, we're getting into your board questions, all about redonk quorums, bureaucratic nightmares, and absentee board members. You don't…
Two Thumbs Down [not-audio_url] [/not-audio_url]

Duration: 20:13
Tis the season for… Giving Tuesday! The Tuesday after Thanksgiving, every nonprofit you've ever thought about will be contacting you about giving to their Giving Tuesday campaign. But should they? We're bringing our epis…
Onto the Next Chapter! [not-audio_url] [/not-audio_url]

Duration: 19:22
We've got a vocab lesson for you today – what's the difference between a nonprofit chapter and a nonprofit affiliate? I don't blame you if you don't know - most people use those words interchangeably! How can you tell th…
Ghouls and Goblins Unite! [not-audio_url] [/not-audio_url]

Duration: 22:24
Hang tight – we're going alllll the way back to our very first episode for this special Halloween celebration! Jordan Couch, lawyer from Tacoma and friend of the pod, came on to answer some ~spooky~ nonprofit questions a…