"We need breakthroughs," Gates said at the National Charter Schools Conference in Chicago. "And your charters are showing that breakthroughs are possible."
The Bill & Melinda Gates Foundation has been a big player in the school reform movement, spending about $200 million a year on grants to elementary and secondary education. Gates said charter schools and their ability to innovate are a key part of the foundation's education strategy.
"I really think that charters have the potential to revolutionize the way students are educated," Gates said.
Charter schools receive taxpayer money but have more freedom than traditional public schools to map out how they'll meet federal education benchmarks.
Nelson Smith, president and chief executive of the National Alliance for Public Charter Schools, said 457 charter schools have opened in the last year for a total of about 5,000 charter schools educating about 1.65 million children nationally.
Gates said his foundation wants to focus on promoting and sharing effective teaching practices. But he said charters that fall below public school performance averages also need to be identified and either improved or closed.
"The deal that allowed for the autonomy really has to be a real deal," Gates said. "The freedom to perform in new ways meant that if you don't perform that things are shut down after being given a chance."
Smith said charter schools are being shuttered if they don't meet academic standards.
"People who oversee charter schools are getting very serious about that," he said. "The charter promise of autonomy for accountability is really being realized."
Obtaining proper facilities also has proved to be a challenge for charter schools nationally, said Caprice Young, president and chief executive of KC Distance Learning in Portland, Ore.
"While the money may follow the student, the facilities don't," said Young, who also is a board member of the National Alliance for Public Charter Schools. Gates said his foundation is working to help charter schools with financing facilities so they can receive larger loans at better rates.
Gates said charter schools find themselves with an "historic opportunity."
"The majority of children in the country are attending schools that don't work for them," Gates said. "So it's imperative that we take the risk to make change, not just small changes at the margin but dramatic changes that are centered around the student."