When the Bush administration set out six years ago to create an office of education innovation, it did not envision spending millions of dollars on a museum dedicated to highlighting the importance of New Bedford, Mass., in the 19th-century whaling industry.

As they tout educational innovation on the campaign trail, Sens. Barack Obama and John McCain should take sharp note of how a “enimble, entrepreneurial arm of the U.S. Department of Education” ended up spending hundreds of millions of dollars on not-so-cutting-edge ideas, ranging from the Old Dartmouth Historical Society’s whaling museum to a program promoting “the teaching of traditional American history.” Reaching agreement on the importance of a muscular federal role in driving education innovation is easier than avoiding the mistakes that have sunk such efforts in the past. If the next president aims to do innovation smarter, there are key steps he must take.

Both McCain and Obama have espoused the increasingly widespread view that entrepreneurial organizations, working outside government but in partnership with it, can bring life to new ideas that will get results. (“McCain and Obama Tussle on Education,” Oct. 22, 2008.) In a major education address in Ohio last month, Obama called for a massive expansion of funding for innovative and entrepreneurial efforts, and for more and better charter schools. He cited America’s slipping economic competitiveness and called for “a new vision for a 21st-century education” one where we aren’t just supporting existing schools, but spurring innovation.

McCain, likewise, has offered support for an entrepreneurial change agenda, going so far as to name pioneering organizations such as Teach For America, and The New Teacher Project as allies in his reform effort, and praising reforms favored by many leading innovators, such as rewarding teachers for the performance of their students. Both presidential candidates have been vocal in their support of charter schools, perhaps the leading entrepreneurial strategy for change in education.

It is a wonderful thing that both candidates have made clear their commitment to new forms of public-private partnership. These ideas already are bearing fruit in groups such as the Knowledge Is Power Program, the SEED Foundation, and Aspire Public Schools—organizations that have changed the lives of thousands of low-income children. Bold, smart support for the creation and growth of results-oriented organizations like these will pay handsome dividends for children. Moreover, a major federal investment could dramatically increase the number of powerful new ideas in education, and could help scale up proven entrepreneurial ideas far beyond what private philanthropy can do today—especially given the current financial crisis.

But the long-troubled relationship between the federal government and educational innovation teaches us that the president who takes office in January will need to make some savvy moves to avoid the mistakes of the past. Too often, the forces of bureaucracy and politics have stood in the way of smart investments in innovation, as funding has been diverted to worthwhile but established ideas that do little to change the field. Or, worse, money has been squandered on projects that have done much for their political sponsors, but little for educational progress. From the Nixon-era National Institute of Education—an entity that resembled the National Institutes of Health in name only—to the current Office of Innovation and Improvement, too much federal innovation money has gone the way of the whaling museum.

This is hardly surprising. Indeed, to succeed, a federal innovation office must do exactly what government bureaucracies rarely do well: direct public funds toward unproven ideas, take risks, sustain investments over time, and avoid patronage. To navigate this minefield, the next president must create an education innovation office worthy of the name: It must enjoy enough independence to avoid political pressure and to make risky investments, but sit close enough to the federal education bureaucracy to infect it with an entrepreneurial mind-set, and it must be transparent enough to be a good steward of public money.

In their excellent new paper on education innovation for the Brookings Institution, Andrew J. Rotherham and Sara Mead offer a solution. Noting that private-sector firms often wall off research-and-development departments from the rest of their bureaucracy, Rotherham and Mead argue that the innovation office should be overseen by an independent review board appointed by members of Congress, and headed by an assistant secretary of education. Such a structure would give it influence, visibility, and protection.

Under this structure, a newly minted federal office of educational entrepreneurship and innovation would oversee two funds: an Education Innovation Challenge program that would help new ideas with great potential get off the ground, and a Grow What Works program to scale up proven entrepreneurial efforts. Those funds would support the creation and growth of high-performing schools, as well as new strategies for preparing teachers and principals and new tools such as curriculum, assessments, and technology that make schools stronger. Both of the funds would be highly results-oriented, requiring solid evidence that the innovations were leading to meaningful improvement in student performance, and both would be subjected to rigorous evaluation.

Working together, these two programs would stimulate the kind of groundbreaking work in education that the National Institutes of Health do in medicine and the Defense Advanced Research Projects Agency does in the military. Moreover, the availability of such funding would allow leaders of innovative organizations to focus more on work that directly benefits children, rather than the fundraising that consumes so much of their time now. Given the benefit that entrepreneurial ventures such as KIPP and TFA already have provided to low-income children, the value of expanding such efforts, wisely but boldly, would be vast-and could be accomplished at a fraction of what the government spends on military and medical R&D. (It could also be done under existing budget constraints—welcome news amid the current financial woes.)

Yet beyond the two funds, entrepreneurial thinking must function not as an isolated program in the next president’s Education Department, but as a mind-set. A nimble, urgent, results-oriented approach cannot be relegated to a single office; it must be the approach that guides the entire department. It’s up to the next president to make sure that happens.

Great entrepreneurs harness the pragmatic American spirit to spread what works and redesign what doesn’t. In figuring out how to redesign the federal approach to education innovation, the next president must do both.

Ted Mitchell is the chief executive officer of the San Francisco-based philanthropy NewSchools Venture Fund and the president of the California state board of education. Jonathan Schorr is a partner at the NewSchools Venture Fund and the author of Hard Lessons: The Promise of an Inner-City Charter School (Ballantine Books, 2002).