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The U.S. Department of Education is for school districts and nonprofit groups that want a piece of the $650 million grant program, including evidence of past success in helping students most in need and significant financial commitments from the private sector.

Secretary of Education Arne Duncan declared last week that he鈥檚 looking for 鈥渃utting-edge ideas that will produce the next generation of reform鈥� through what has been dubbed the 鈥渋3鈥� grant competition. Its first round will begin next spring, when applications are due.

The proposed rules for the i3 program, a piece of the nearly $100 billion for education in the American Recovery and Reinvestment Act, were published last week in the Federal Register. The public will have 30 days to comment before the department makes any changes and issues final regulations.

The grants, which are meant to expand promising, innovative education improvement practices at the district level, would be divided into three tiers, with programs that have already shown evidence of success eligible for the heftiest grants.

The biggest awards, or 鈥渟cale up鈥� grants, would be worth up to $50 million each for programs that are supported by 鈥渟trong鈥� evidence, such as evaluations of programs that use random assignment of students.

The second category鈥斺�渧alidation鈥� grants, of up to $30 million each鈥攚ould go to programs with 鈥渕oderate鈥� evidence of success. That could mean 鈥渜uasi-experiments鈥� that involve sophisticated statistical techniques that attempt to evaluate the true effects of a program or intervention.

鈥淒evelopment鈥� grants of up to $5 million each would be linked to programs that have 鈥渞easonable research-based findings or theories.鈥�

With the proposed i3 guidelines, the Education Department is putting a premium on evidence, experts in the field say.

鈥淭he department is really trying to push the envelope for evidence-based innovation. It is a bold step in the right direction in building from and on a knowledge base for reform,鈥� said James W. Kohlmoos, the president of the Knowledge Alliance, a Washington group that represents research organizations.

At the same time, the proposed regulations seek to balance the department鈥檚 goal of financing innovative ideas that might be untested and the goal of funding those with good prospects of success, based on past evidence.

鈥淭here鈥檚 an interesting tension: They want to scale up what works, but they also want to innovate,鈥� said Andy Smarick, who served in the department under former Secretary Margaret Spellings and is an adjunct fellow at the American Enterprise Institute, a Washington think tank.

Collaboration Encouraged

School districts and nonprofit groups working in conjunction with a district or a consortium of public schools are the only two types of entities eligible to apply for the money, which will be awarded by Sept. 30, 2010. That eligibility pool contrasts with that of the Race to the Top Fund competition, which will provide $4 billion to states, also under the education portion of the stimulus law.

One important i3 eligibility requirement still up in the air is whether, as required in the stimulus law passed by Congress, districts must have made adequate yearly progress under the No Child Left Behind Act for two years in a row to qualify for the innovation grants. The Education Department is working to eliminate that requirement through legislation pending before both the House and the Senate, but department officials said that unless it鈥檚 changed, they must proceed under the original language.

鈥淥ur goal is to broaden out and give more districts and more nonprofits a chance to compete,鈥� Secretary Duncan said.

And unlike for the Race to the Top grants, in which the department is proposing that states meet certain criteria before being eligible to compete, no such lines would be drawn for the i3 grants.

鈥淓veryone has an absolute chance to compete here,鈥� Mr. Duncan said. 鈥淲e look forward to a vigorous competition.鈥�

With all the emphasis on scaling up programs, the department doesn鈥檛 want districts to be intimidated by the application process, officials say.

James H. Shelton, the assistant deputy secretary for innovation and improvement, said that some 鈥渉ome-grown innovation鈥� may not have been designed to go beyond a district鈥檚 borders. He wants to encourage districts, especially rural ones, to think of taking part in joint ventures with state education agencies, nonprofit groups, or regional centers of education.

But rural districts, especially, may find the notion of scaling up unworkable, said Marty Strange, the policy director of the Rural School and Community Trust, based in Arlington, Va.

鈥淭rying to get to a national rural strategy is never going to work,鈥� he said. 鈥淲e have native communities in Alaska, fishing villages in Maine, Hispanic communities in border towns. They鈥檙e all very very different.鈥�

Funding Match

The proposed regulations also signal that the Education Department wants a strong commitment from the philanthropic community. Each application would have to include a 20 percent private-sector funding match, or request a reduced matching level.

In addition, any successful applicant would have to target the award toward improving achievement for 鈥渉igh need鈥� students and address at least one of the four 鈥渁ssurances鈥� tied to the receipt of economic-stimulus aid for education: improving teacher effectiveness, improving the use of data, turning around low-performing schools, or complementing the ongoing effort to craft common standards and assessments. The proposed regulations define high-need students as those who are at risk of academic failure, including those with disabilities or with limited proficiency in English.

The Los Angeles Unified School District already has its eye on the 鈥渟cale up鈥� grants.

But first, the 700,000-student district will need to find out whether the ayp requirement remains, since the district has not made such progress for two years in a row. As an alternative, the district might seek to get a consortium of its schools to go after the money.

Matthew Hill, the district鈥檚 administrative officer, said officials in Los Angeles are especially interested in building on their success in turning around low-performing schools, citing some of the district鈥檚 new magnet and charter school programs.

But questions remain, such as whether the awards will be based, at least in part, on a district鈥檚 enrollment. Mr. Hill noted that $50 million for a large district such as Los Angeles is different from $50 million for a small district.

In addition, Los Angeles officials want to know more about what it means to have proven research on a program鈥檚 effects.

鈥淲e have some strategies that are nascent, but we鈥檝e gotten some student growth out of them. Will those count?鈥� Mr. Hill asked.

The federal department also wants to give bonus points for grant applications that focus on early education, college access and success, students in special education and those with limited English, and rural school districts.

鈥楽ome Failure鈥�

But whether the department鈥檚 competitive priorities will actually result in meaningful reforms in those areas will remain to be seen, said Mr. Strange of the rural schools鈥� coalition.

鈥淲hat I worry about is that this preference for rural will simply draw applications from people who don鈥檛 have rural experience, who see this as a way to increase their prospect for winning,鈥� he said.

The department will need to find experienced evaluators who are versed in research design and statistics, said Mr. Shelton. He expects to find a pool of 200 judges who can help review up to 3,000 expected applications.

All grant applications would have to contain proposals on how the programs would be evaluated. Winners, who would not get their award funding at all once, would be expected to meet multiyear milestones. If a project did not, Secretary Duncan said, the department would be prepared to stop funding it.

鈥淣ew and innovative ideas won鈥檛 always work,鈥� Mr. Duncan said. 鈥淲e鈥檒l experience some failure.鈥�