Bill Gates Gets Schooled

Why he and other execs have struggled in their school reform efforts, and why they keep trying

Editor's Note: On June 15, William H. Gates III announced that he would give up his day-to-day responsibilities at Microsoft Corp., by stepping down as the company's chief software architect. He plans to continue as chairman of the company through 2008, when he will cede any leadership role at the company he co-founded 31 years ago. The following story shines a spotlight on Gates's post-Microsoft future. He is giving up the chief software architect role, so that he can concentrate his time on the charitable activities of the Bill & Melinda Gates Foundation. One of the $29 billion foundation's key initiatives is improving high-school education in the U. S. Here's a look at how Bill and Melinda Gates have become personally involved in this Herculean task.


What does a troubled public school do when Microsoft Corp. (MSFT ) Chairman Bill Gates and his wife, Melinda, come knocking with $1 million and a rescue plan? Manual High School, a hulking, 112-year-old brick edifice serving several poor neighborhoods in Denver, faced that question back in 2000. It had been a respected school for many years, with a mix of middle-class white kids, most of whom were bused in, and less-well-off minorities. The school scored well on tests overall and fielded outstanding sports teams. But when forced busing ended in 1996, Manual's student body quickly became 90% minority and much poorer. Soon the school was dead last on state tests, with a mile-high dropout rate of about 50%. The Gateses proposed to split up the student body of 1,100 into three smaller schools. The theory was that in more intimate environments, students, teachers, and staff could develop close relationships that would boost kids' desire to learn and stay in school.

But even the world's richest couple couldn't pass this test. The breakup occurred too quickly, before anyone had developed a clear vision for the three schools, each of which was supposed to have a theme such as leadership or art and culture. Two of the three principals were rookies, so they didn't have experience to guide them. Because the schools were so small, they couldn't offer as many electives as before. French was eliminated, leaving only Spanish for many students who already spoke it. Advanced Placement courses were reduced. Sports teams struggled just to field squads. When the famed choir was limited to one school, the popular director left, and that program withered, along with band and theater.

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Soon, under Colorado's unusual open-choice rules, athletes, musicians, and college-bound students began to flee to other Denver schools. As they did, the city reduced Manual's faculty, sending it into a death spiral. "The only kids left were the hardest to educate," says Mariah Dickson, a former Gates-funded reform adviser at Manual. With just 580 students expected in the fall, Denver is shutting the school, ending the experiment.

"We view the decision to move Manual students to other schools as an admission of complete failure," Denver Public School Superintendent Michael F. Bennet wrote in April to two former Denver mayors who had been involved with the school. Concedes Van Schoales, president of the nonprofit that manages Gates grants in Colorado: "We were trying to build a plane as we were taking off, and we crashed."

The failed exercise at Manual was among the first grants the Gates Foundation made as part of the couple's decision in 2000 to include high school education among their philanthropic causes. Their $29 billion foundation had already launched an ambitious global health initiative to prevent deadly diseases such as tuberculosis and AIDS in Africa and other poor regions. The Gateses decided to expand their charity to include public education, whose inequities in the U.S. had long troubled both of them. Education "has led to a country that's been very innovative and created lots of jobs," Bill Gates says. "Yet when you look at it, you think the broad excellence we need and the changes we need aren't necessarily going to happen" without intervention from the private sector.

After gathering a team of experts, they decided to focus on high school dropouts, the 20% to 30% of teens who fail to get a degree in four years. The foundation embraced what many social scientists had concluded was the prime solution: Instead of losing kids in large schools like Manual, the new thinking was to divide them into smaller programs with 200 to 600 students each. Doing so, numerous studies showed, would help prevent even hard-to-reach students from falling through the cracks. The foundation didn't set out to design schools or run them. Its goal was to back some creative experiments and replicate them nationally. "I thought, if you get enough of these going across the country, people will realize they're good, and more and more will pop up," says Melinda Gates, who devotes several hours a week to education philanthropy.

Six years and a steep learning curve later, the Gateses see just how intractable are the many ills plaguing America's worst schools. It has been a difficult, even humbling experience. Melinda Gates says she and Bill didn't realize at first how much cooperation it would take from school districts and states to break up traditional big schools. "If you want to equate being naive with being inexperienced, then we were definitely naive when we first started," she says. "There are a lot of places where many people have given up, or decided that 'bad schools are not my problem.' There are also a lot of entrenched interests."

Visits to 22 Gates-funded schools around the country show that while the Microsoft couple indisputably merit praise for calling national attention to the dropout crisis and funding the creation of some promising schools, they deserve no better than a C when it comes to improving academic performance. Researchers paid by their foundation reported back last year that they have found only slightly improved English and reading achievement in Gates schools and substantially worse results in math. There has been more promising news on graduation rates. Many of the 1,000 small schools the Gateses have funded are still new, however, and it's too soon to project what percentage of their students will finish school and enter college, also a foundation goal. The collapse of Manual High is an extreme case, but one that points to a clear lesson: Creating small schools may work sometimes, but it's no panacea.

The couple says the setbacks don't mean they have squandered the $1 billion the foundation has spent so far. Instead, they view their crash course as research and development for educators nationally who are trying to sort out what works and what doesn't. The Gates record shows that besides creating a more personalized setting, it's vital to hire motivated and qualified teachers and institute tougher academic standards. The most impressive evidence of what's possible comes from New York City, where 14 Gates-funded schools will hand out diplomas this month to some 70% of their students, double the graduation rate of the large schools they replaced.

Just as the Gateses have gotten schooled about schools, so have other business leaders. From General Electric Co. (GE ) to IBM (IBM ), executives have come to realize that traditional handouts of cash and well-meaning volunteer days may have helped some kids along the way, but they haven't had a national impact. "We don't just write checks anymore. We expect a return on our investment in terms of improved student achievement," says Dan Katzir, managing director of SunAmerica Inc. (AIG ) founder Eli Broad's education foundation.

The Gateses believe they have seen such a return on the $17 million their foundation has sunk into San Diego's High Tech High since 2000, although the experience there also underscores how difficult it is to duplicate success on a broad scale.

The San Diego school feels more like a tech startup than a collection of classrooms. Skylights let in the California sunshine, and student art hangs everywhere. The qualities that the Gates Foundation encourages are all present at High Tech. One is a rigorous curriculum that creates high expectations. Although High Tech rarely uses textbooks, students do detailed research for complex team projects combining math, science, and history. The Gateses promote teaching that is relevant to kids and will keep them interested, such as the field guide High Tech students produced on the environment of San Diego Bay. And the couple advocates close ties between students and adults, both faculty and sponsors of outside student internships. Last fall, one group of High Tech students and teachers spent two months in Mexico researching plankton, designing a satellite tag to track a sea turtle, and shooting a documentary about the region.

Such encounters can transform students. Melvin Jackson, a graduating High Tech senior, lives in the gang-plagued Encanto neighborhood with his grandmother and three-year-old brother. He earned a B average in such classes as calculus, English literature, and environmental science. After working on the documentary in Mexico and other school videos, he decided to become a filmmaker. One of his favorite memories, he says, was a school film festival, complete with Hollywood searchlights, where students exhibited their work. In the fall, he will head to San Diego State University, where he plans to major in film. Without the inspiration he got at High Tech, says Jackson, "I probably would have been in a gang. I would have been dead."

An astonishing 99% of the students at High Tech who started as freshmen graduated in 2005, vs. an 85% rate for San Diego County as a whole. This is especially striking considering that High Tech's student body is representative of the county (it was randomly selected on a proportional basis from all county Zip Codes). Bill Gates has visited twice and finds that, improbably, it shares some qualities with his alma mater, Seattle's exclusive Lakeside School. "If the right things are done with teacher incentives, student involvement, and curriculum," he says, "you can get the great result we deserve, which is virtually everybody being college-ready." High Tech's founding principal, Larry Rosenstock, predicts the school will wean itself from Gates money by 2010, after a decade of lavish outside attention.

Nationally, new versions of High Tech High can't be rolled out like so many Starbucks Corp. (SBUX ) franchises. Apart from an infusion of ideas and startup money, successful school reform usually requires a virtuoso principal, and such leaders are hard to come by. Rosenstock by all accounts is a tireless and charismatic figure who sparks enthusiasm among teachers and students alike. In the absence of someone like him, the smartest plans and best intentions can come up short.

Rosenstock himself has encountered frustration in trying to spread High Tech's innovations to other schools. He agreed in 2000 to work with a loose network of schools in 12 other cities from Chicago to Tucson. But that project hasn't always gone smoothly. One point of contention has been Rosenstock's belief that dividing students into honors and non-honors classes lowers expectations for ordinary students and undercuts the benefits he sees when teens learn as a team. Two Pennsylvania schools were excluded because they either wanted to track students by ability or admit them selectively. The remaining members of the network are still in touch with High Tech, but Rob Riordan, one of Rosenstock's top deputies, says: "We have less control in those situations." That's why he and Rosenstock are turning their attention to creating schools in neighboring Escondido and Chula Vista, where they have the ability to transplant trusted staff members from High Tech. "I want to be remembered for the quality of my schools, not the quantity," Rosenstock says.

The small-school idea remains central to the Gates vision. An extensive body of academic research shows that smaller schools have higher rates of attendance, graduation, and parent involvement. They also tend to be less violent. Many studies, although not all, have also found gains in academic achievement. So why didn't the Gateses' initial round of small-school investments, in Manual High and elsewhere, live up to the promise?

In 2001, Tom Vander Ark, a former Federal Way (Wash.) schools superintendent who heads the Gates Foundation's education initiative, hired two outside groups to compare Gates-funded schools with others in the same districts. Last year, the American Institutes for Research and SRI International found that the Gates grantees had created schools with welcoming cultures, which raised attendance. They also found that in reading and writing, the Gates schools give students more challenging assignments.

But academic results were disappointing. English and reading were only slightly improved, with 35% of the small schools' students doing moderate-quality work or better, compared with 33% at large high schools. The small-school goal of engaging students in projects that combined math with other subjects produced poor results because rigorous math instruction often got short shrift. Only 16% of students at Gates schools made the grade in math, vs. 27% at traditional schools.

While these results are preliminary, Vander Ark concedes that the foundation initially placed too much faith in just making schools smaller. He realizes now how important it is to focus on what happens in the classroom. "Today we are much more explicit about the curriculum," he says.

The Gateses are applying what they have learned to New York, their most ambitious effort to transform a school district. Their foundation has pumped in more than $100 million since 2000 to help create some 150 new small schools that currently enroll more than 50,000 students. Most are only partly full, since they typically start with only the ninth grade and add a new grade each year. Once they're up and running with complete student bodies, new small schools will serve more than a quarter of the city's 350,000 high school students, says New York City Schools Chancellor Joel I. Klein.

Some of the Gates campaign's most hopeful early returns have come from New York, in part because the foundation has worked effectively with New Visions for Public Schools, a local nonprofit with long experience developing small schools. This month, the first 14 of 78 new high schools the Gateses created with New Visions will hold their first graduations. About 70% of students who began ninth grade four years ago are expected to graduate, says New Visions President Robert L. Hughes. That's double the rate of the larger schools they replaced and well above the city's 54% graduation rate. More broadly in New York, "a large percentage of the kids [in the 78 New Visions schools backed by the Gateses] are on track to pass the Regents exams and graduate," says Elizabeth R. Reisner, principal of Policy Studies Associates Inc., a Washington (D.C.)-based educational research firm that has been evaluating the New Visions schools since 2002.

If it can happen in the South Bronx, it can happen just about anywhere. What was once one of the worst schools in the city, South Bronx High, is now home to Mott Haven Village Preparatory High School, a 325-student enclave on one and a half floors of the old school building (two other new small schools occupy the rest). This month at least 80% of the 81 students who started four years ago will graduate. Of those, 55 have been accepted at college. The graduation rate at the old South Bronx High was less than 40%.

Mott Haven's rebirth has mimicked the startup at High Tech High. Principal Ana Maldonado recruited an almost entirely new staff. Teachers from the old school had the right to apply, but Maldonado didn't choose many, instead tapping educators from other city schools and beyond. The excitement generated by the Gates-funded reform lured Mike Lamb, 29, a lanky idealist raised in tony Scarsdale, N.Y., and educated at Harvard University's Graduate School of Education. He says the trust he won coaching students on the basketball court helped him to persuade them to work harder on writing essays in class.

The school's community partner, East Side Settlement House, contributed nine staffers to teach time management, discipline, and how to succeed on tests. Once students begin to catch up, Gates money helps pay for Scholastic Assessment Test prep courses and that middle-class rite of passage, the college tour. The gratifying payoff: Although only about half of New York high school students pass the state Regents exams needed to graduate, 86% of Mott Haven students passed the global history test, while 96% passed math and 98% passed English.

But New York's school system is gargantuan, and parts of it are deeply dysfunctional. As generally positive as Policy Studies Associates is about the Gates program, the research group cautions that some New York schools the foundation has aided haven't responded as well as Mott Haven.

In its latest report, scheduled to be released later this month, Policy Studies found that only a third of the schools it has visited had benefited from community partners as helpful as East Side Settlement House. Another third had "ineffective partnerships," in which outside nonprofits clashed with schools or did inconsistent work, researchers reported. They warned that social tensions are rising in some of the new schools as they keep adding more grades and students. As a result, the percentage of students suspended from these schools tripled from 2% in the 2002-2003 school year to 6% last year, which is approximately the systemwide average.

"The transition from the old, big schools to the small schools has been more complicated than we expected," says Hughes of New Visions. In a few instances, he adds, "We've removed principals and changed partners." If those schools don't improve, he says he won't hesitate to close them.

Where there are problems, Melinda Gates says, she and her husband are unafraid "to take those [negative] results and publish them broadly and tell everybody: 'Yep, here are some things we're finding. Let's have a conversation about it, and now let's figure out how to solve it."'

One conclusion that's unlikely to change: Starting schools from scratch is a lot easier than trying to repair broken ones. Vander Ark now argues that as many as 1,000 of the country's 20,000 public high schools are so hopeless that they should simply be closed. That may be so, but the real question is whether financially stretched educational systems can muster the leadership and expertise to come up with more effective replacements.

In Denver, the decision to shut Manual High has provoked anger among many residents who interpreted the move as an attack on black and Latino students still enrolled at the fragmented and sinking school. But officials say they had no choice. With so many students fleeing, "in the near future, we would not even be able to offer the bare minimum classes required," says Superintendent Bennet. "From the perspective of the kids, things ended up getting worse," admits Schoales, who oversees Gates grants in Colorado. Denver says that it will reopen Manual in fall, 2007, starting with only a ninth grade and then adding one grade a year, a gradual approach that some new Gates schools are employing. But this time, Denver officials say that they will try to recreate Manual High without the Gates Foundation's guidance and money.

Nearly six years into their education about America's inadequate schools, Bill and Melinda Gates say that despite the missteps, they're as committed as ever. Their foundation has refocused its efforts over the past two years to try to address high school failings more systematically. It is funding such reform groups as Achieve Inc., a champion of exacting academic standards, and backing improvements in the way local districts measure testing. In April, it gave $21 million to the Chicago Public Schools, in part to develop a college prep curriculum, a brave goal in a city with a 46% dropout rate.

Melinda Gates says she and Bill are pacing themselves. "Sometimes you get other people who come in and do small pieces of this, and then their money's spent and they go away," she explains. "This is something that we're going to stay after for a long time. You come to talk to me in 20 years, and we'll still be tackling this problem."

By Jay Greene & William C. Symonds

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