When a charity engages in a transaction that unduly benefits an insider, the tax that follows is not paid by the charity. It is paid by the insider personally, and by the board members who approved it, and it is imposed on the transaction rather than on any harm. That design decision — penalizing the person rather than the organization — is the organizing feature of exempt organization enforcement, and it explains a body of rules that otherwise appears arbitrary. This article explains the self-dealing regime that governs private foundations, the intermediate sanctions regime that governs public charities, why the two differ so sharply, and what the minimum distribution, business holdings, investment, and expenditure rules require. It closes with donor-advised funds and the practical governance that keeps a well-meaning board out of trouble.