In a sit-down with the Chicago Tribune, Emanuel said the city should launch its own version of President Obama's Race To the Top program, which gives money to states with the best plans for education reform.
He said it can be done with private funding.
"We've raised a ton of money for the Olympics. Let's raise a ton of money for school reform. Let's not wait for the feds," he said.
He also criticized teachers' unions for their opposition to the initiative and said the city can do a better job promoting parental involvement.
"One of the things I would like to look at is parents signing a contract. They would be committing themselves to reading a half-hour each night to kids, eliminating TV," the former White House Chief of Staff said.
Emanuel said some school funding could be directly tied to parents interaction. He suggested keeping track of things like attendance to parent teacher conferences to be used in funding decisions each year.