The Bertelsmann Foundation released on April 18th 2012 at its Washington conference a blueprint for a new sovereign debt rating agency called INCRA.

The mission of INCRA as an independent institution is to conduct sovereign-risk assessment, and to raise the quality of sovereign ratings.  The business model for INCRA is to be non-profit and based on investor pays for ratings as opposed to the issuer pays model. 

Funding is to come from a broad coalition of entities including governments, corporations, NGOs, foundations and private donors.  An endowment of US$400 million is the estimated amount needed to establish and maintain INCRA, safeguard its independence, and generate sufficient annual revenue for maintaining operations.

INCRA’s governance structure and operating procedures are to provide transparency and legitimacy.  A supranational “Stakeholder Council” is to ensure independence by serving as a buffer between funders and the operational business.  A “Credit Policy Committee” functions as a quality-control body, ensuring that ratings are grounded in a competent and comprehensive methodology.

INCRA’s financial framework is based on an endowment that provides for sustainability and security. The Bertelsmann Foundation names the G20, which has already addressed the need for reform of credit rating agencies, as one of the best forums for garnering the political will to establish INCRA. The Foundation also calls for corporate players, NGOs and the non-profit sector to commit themselves to playing a more meaningful role, through INCRA, in the global financial sector.

Source: Bertelsmann Foundation:  The complete INCRA blueprint and an executive summary can be found at:

The Bertelsmann Foundation is the North American arm of the Germany-based Bertelsmann Stiftung, a non-profit organization established in 1977 by Reinhard Mohn, who endowed it with a majority shareholding in Bertelsmann AG.
Bertelsmann has made several attempts in the past to launch a credit rating agency in Europe in competition to the three large rating agencies.  It has always abandoned the idea.  Based on the perceived shortcomings of the traditional rating agencies Bertelsmann is now trying a new approach using its Foundation with a non-profit and investor pays based model.  The ‘deep pocket’ approach may get things started.  Whether the investors will pay business model will succeed is hard to say.  The management consultancy Roland Berger (Germany) is currently trying a similar model in Europe but finds it hard to raise sufficient capital for the idea. 
In the meantime the current market leaders are enjoying renewed growth and high profitability as well as market acceptance, while Egan Jones, a newcomer with an investor pays business model, is sued by the SEC for misleading investors.