Summary of Advantages and Disadvantages of AAU Affiliation for NEMWA

Last Updated:  10/30/2005

Concept:  Make NEMWA a "Level Three" AAU club and sanction all NEMWA tournaments under the AAU umbrella.

Requirements:  AAU tournament sanctions require ALL participants must be AAU card holders.  In order to be covered under AAU accident medical and event liability insurance everyone directly associated with an AAU activity must be an AAU card holder.  This implies that all NEMWA officers, wrestlers, coaches tournament directors and referees must be AAU card holders.  It is not necessary for table help, concession workers, and other peripheral volunteers to be AAU members. 

Costs: 

• Individual AAU youth memberships are either $12 or $14 per year.  The $14 "Added Benefit" version provides accidental medial coverage at both AAU and non-AAU wrestling tournaments.
• Individual AAU adult non-athlete memberships are either $14 or $16 per year.  The $16 "Added Benefit" version provides accidental medial coverage at both AAU and non-AAU wrestling tournaments. 
• Level two club AAU membership is $60 per year. 
• Tournaments must be sanctioned by the AAU.  The event sanctioning fee is $48 per tournament day.  Fees are waived after seven events per calendar year.  Therefore, the cost of sanctioning the entire NEMWA season under the AAU would cost $336 per year.
• Optional Directors and Officers (D&O) insurance is available through the AAU for $399 per year. 
• Optional "Wrap Around" insurance is available for $395 per year.  This insurance covers special events like fund raisers, leases, meetings, awards banquets, etc. 

It is proposed NEMWA clubs make AAU membership a part of their registration process for all wrestlers and coaches.  Therefore, NEMWA would pay for the remaining costs:

Description	Cost Each	Qty	Total	Comments
AAU Cards for NEMWA Officers	$14	4	$56
AAU Cards for Traveling Officials	$14	10	$140	AAU cards for officials who only officiate one tournament are paid for by the host tournament.
Level 2 Club Membership for NEMWA	$60	1	$300	If NEMWA chooses level 2 membership without the tax exempt status, the cost is $60 per year.
Tournament Sanctioning Costs	$48	7	$336	After seven tournaments, sanctioning fees are waived.
NEMWA Directors and Officers insurance	$399	1	$399
Total Annual NEMWA Cost			$1231	$991 if Level 2 membership is chosen

Benefits of AAU Affiliation:

• Simplest, lowest cost method of assuring complete and uniform accident and liability insurance for NEMWA events.  The AAU liability plan provides $10 million in coverage.   The AAU accident medical plan provides $50,000 in accident medical insurance with a $200 deductible.  Details can be found at http://www.aausports.org/pdf/sports_insurance_brochure.pdf
• AAU Insurance covers practices as well as tournaments. 
• AAU Insurance is underwritten by one of the largest insurance companies in the world and has a proven track record of defending sports organizations from frivolous lawsuits and paying claims when merited. 
• Many NEMWA wrestlers are already buying AAU cards to participate in AAU events in wrestling or other sports.
• The AAU has no interest in changing the way NEMWA operates.  There is no need to change NEMWA rules, weight classes, age groups, wrestler or club eligibility, etc.  However, there are national AAU policies that apply at the club level.  These include sexual misconduct, misrepresentation, relationship with sports agents, use of AAU copyrighted items, use of mailing lists, etc.  None of these AAU policies appear to be burdensome to AAU members. 
• Level 3 membership provides tax-exempt status under the AAU umbrella.  This allows NEMWA to avoid paying sales tax on its purchases.  More importantly, this would allow NEMWA to ask for businesses and individuals to donate to NEMWA and receive a tax deduction as a charitable contribution.  An example of this may be providing trophies for the regional or league finals.
• AAU documents already include basic risk management language (e.g. "...I certify that I have never been convicted of any sex offense nor
  felony...").
• Since AAU affiliation is an annual approach, there is no problem going to another solution the following year if a better solution is found.
• For wrestlers competing in non-AAU tournaments the AB membership option provides inexpensive accident medical coverage for all events. 
• AAU membership allows NEMWA to have a voice in the AAU and can vote on issues important to Michigan youth wrestling.

Disadvantages to AAU Affiliation:

• The logistics of insuring that wrestlers, coaches, and officials are AAU members prior to the first tournament are slightly more complex than the alternatives. 
• AAU affiliation may bring about more benefits (and costs) than NEMWA really needs. 
• Level 3 membership and participation under the AAU 501(c)3 status requires more rigorous financial accounting.  All NEMWA income and spending will need to be accurately tracked according to the AAU fiscal year and forms filed with the IRS. 
• All the costs with the AAU approach recur every year.  

Primary Alternative to AAU Affiliation:  In order to match the scope of the AAU solution, several actions would have to take place to constitute a reasonable alternative:

• Purchase general liability and accident medical insurance independently from AAU.  While equivalent coverage would cost as much as AAU, lower coverage levels are possible.  Costs can go as low as $6 per person (all athletes and named coaches).  Logistics would be almost the same as with AAU - Club rosters would have to be submitted prior to a cut-off date determined by NEMWA payment made for insurance to go into effect.  An example of this kind of insurance approach can be seen at this link:  Combined liability and accident medical policy summary  These costs would recur every year.
• Purchase Directors and Officers Insurance.  If this is purchased independent of the AAU, coverage is expect to cost double the AA cost ($700).  This cost would recur every year.
• Implement comprehensive NEMWA bylaws and incorporate.  This cost would only occur only once.
• Implement NEMWA risk management system.  This cost would only occur only once. 
• Register as a 501(c)3.  This is not an easy or inexpensive proposition and it is unlikely that NEMWA would be able to accomplish this with the resources it currently has.  However, if it did so, the cost would only occur once.