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Cover Story July 15, 2010, 5:00PM EST

Bill Gates' School Crusade

The Microsoft founder's foundation is betting billions that a business approach can work wonders in the classroom

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Bloomberg News

(Corrects the name of the Massachusetts Business Alliance for Education in the 29th paragraph.)

It's been two years since Bill Gates left his day-to-day role at Microsoft (MSFT) to concentrate on supervising the Bill & Melinda Gates Foundation—and his new enterprise is booming. Headquartered in a converted check-processing center in Seattle's Eastlake neighborhood, the 10-year-old foundation plans to move into a 900,000-square-foot campus and visitors' center near the city's Space Needle next spring. The Gates Foundation opened a London office this year; it also has offices in Washington, Delhi, and Beijing, and 830 employees around the world, up from about 500 in 2008. With assets of $33.9 billion as of Dec. 31, 2009, and America's two richest people—Gates and Warren Buffett—as trustees, the foundation plans to spend $3 billion in the next five to seven years on education. If there's such a thing as a charity behemoth, the Gates Foundation is it.

While its efforts in global health are widely applauded, its record in America's schools has been more controversial. Starting in 2000, the Gates Foundation spent hundreds of millions of dollars on its first big project, trying to revitalize U.S. high schools by making them smaller, only to discover that student body size has little effect on achievement.

It has since shifted its considerable weight behind an emerging consensus—shared by U.S. Education Secretary and Gates ally Arne Duncan—that quality of teaching affects student performance and that increasing achievement is as simple as removing bad teachers, identifying good ones, and rewarding them with more money. On this theory, Gates is investing $290 million over seven years in the Tampa, Memphis, and Pittsburgh school districts as well as a charter school consortium in Los Angeles. The largest chunk of money, $100 million, will go to Tampa's Hillsborough County school district, the eighth-largest in the U.S., with 192,000 students and 15,000 teachers. These carefully selected programs, which will favor or penalize teachers depending on whether students make larger or smaller gains than their test scores in prior years would have predicted, are intended as models that, if proven successful, can be rolled out nationwide.

The Gates agenda is an intellectual cousin of the Bush Administration's 2002 No Child Left Behind law, which required all public schools—though not individual teachers—to make "adequate yearly progress" on student test scores. Some opponents of No Child Left Behind questioned its faith in data; are scores too narrow a gauge of how well kids are learning? Gates sees nothing wrong in relying on quantitative metrics. "Every profession has to have some form of measurement," he said in a late June interview with Bloomberg Businessweek. "Tuning that, making sure it's fair, getting the teachers so they're enthused about it" are the keys.

Still, the prospect of such measurement makes some educators and academic researchers uneasy. They contend that factors such as school leadership and culture exert a powerful influence on student achievement. Moreover, rating individual teachers based on their classroom's test results may be better suited to little red schoolhouses than today's large urban schools, where teachers team up, aides and tutors pitch in, and students come and go frequently.

While cities such as Denver and Cincinnati have experimented with paying teachers for performance, the Gates initiative—called Intensive Partnerships for Effective Teaching—marks the largest and most comprehensive effort to evaluate teachers in all grades and subjects based on student test gains. "The people at Gates believe there is a window right now," says Michael S. McPherson, president of the Spencer Foundation, which supports education research. "They have in Washington an Administration that's broadly sympathetic to their view. They have the attention of the American people, wanting dramatic improvement in the schools. Bill and Melinda Gates want to see results—not just in their lifetimes, but in the next few years."

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