About this episode
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 Understanding Cash vs. Accrual Accounting: https://youtu.be/5tSI1IPBVWk Internal Controls 101: https://birkenlaw.com/blog/internal-controls-101/ Connect with Hannah on LinkedIn: https://www.linkedin.com/in/hannah-hugen-b0045a1b5/ Learn about Abdo: https://abdosolutions.com/ Previous Episode: How to Fix the Culture of Overwork at Your Nonprofit with Rachel Platt https://birkenlaw.com/charity-therapy-podcast/ct153/ Episode Transcript: https://birkenlaw.com/wp-content/uploads/2025/12/CT154HH_Transcript.pdf
