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.
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