Former U.S. President Bill Clinton speaks during the annual meeting of the Clinton Global Initiative (CGI) in New York, U.S., on Tuesday, Sept. 23, 2014. The 2014 CGI theme of 'Reimagining Impact' brings members together to facilitate the development of forward-thinking and to re-envision the way we impact the world. Photographer: Michael Nagle/Bloomberg via Getty Images

NEW YORK -- Charter schools have great potential, but they aren't living up to their promise, former President Bill Clinton said late Tuesday night at a gathering of about 100 international philanthropists and businesspeople.

"If you're going to get into education, I think it's really important that you invest in what works," Clinton said. "For example, New Orleans has better schools than it had before Hurricane Katrina, and it's the only public school [district] in America where 100 percent of the schools are charter schools."

But the reforms shouldn't stop there, he added. "They still haven't done what no state has really done adequately, which is to set up a review system to keep the original bargain of charter schools, which was if they weren't outperforming the public model, they weren't supposed to get their charter renewed," he said.

Charter schools -- which are publicly funded but can be privately run -- present an issue that tends to divide Democrats. Even supporters have argued that such schools are not sufficiently regulated, and various studies show that they are rarely shuttered for low academic performance.

After his speech, Clinton told The Huffington Post that he had been a backer of charter schools when their use first expanded in the 1990s. He said the deal was that in exchange for being "unfettered," they were supposed to do a better job of educating students -- or they would be closed.

The former president made his remarks during an unannounced appearance at a dinner hosted by the Clinton Global Initiative and the Varkey GEMS Foundation, a philanthropic organization based in the United Arab Emirates that runs private schools around the globe and produces education research. The dinner was held to mark the launch of Business Backs Education, a new UNESCO-supported campaign that aims to make education the recipient of 20 percent of global corporate philanthropy aimed at matters of social responsibility by 2020, up from 7 percent now. (There was a panel discussion about it led by CNN host Fareed Zakaria.) The campaign suggests that such increased investment would enable three million more children to attend school annually.

Clinton briefly praised New York City Mayor Bill de Blasio for his work on regulating charter schools. Rhode Island also earned a thumbs up for "rigorously enforc[ing] the second part of the grand bargain, which was any charter school that was doing better than public schools was supposed to systematically work with the public schools to institute the practices that work." But business leaders need to contribute more to education, he said.

"We can do this; this isn't rocket science. We just have to sort of saddle up and do it," Clinton said. "And the thing is, sometimes we overthink it and I'm pretty positive we overtest it," he said, garnering applause.

Clinton said he's "not opposed" to student testing, but he thinks it should be limited. "I think doing one in elementary school, one in the end of middle school and one before the end of high school is quite enough if you do it right." He stressed the importance of good teachers, adding that trimming the number of state tests could give teachers more time to collaborate.