Sustainable Philanthropy Case Study - Getty Foundation
Updated: Jun 12
Sustainable Philanthropy Case Study
Name: Getty Foundation
Type: Private Operating Foundation
Size: $7.3 bn
Year of Establishment: 1982
The Getty Foundation supports the preservation of visual arts in Los Angeles and throughout the world. The foundation’s main grants are directed towards museum collections, strengthening art history, advancing conservation practice, and supporting visual artists. The foundation collaborates with other Getty programs such as the J. Paul Getty Museum, Getty Research Institute, and the Getty Conservation Institute. Since 1984, we have awarded more than 7,500 grants.
No family descendant of J. Paul Getty currently serves on the board of the foundation. Gordon P. Getty, the fourth child of J. Paul Getty, was a trustee between 1955–1966 and 1973–1998.
In 1953, Getty Oil founder J. Paul Getty established the J. Paul Getty Trust with the aim of preserving and funding visual arts. Later, Getty Foundation was established in 1984 in the belief that philanthropy would be critical to carry out the mission of the J. Paul Getty Trust. Today, the trust is the world's wealthiest art institution, and operates the J. Paul Getty Museum, the Getty Foundation, the Getty Research Institute, and the Getty Conservation Institute. 
J. Paul Getty
Since its inception, the Foundation has provided grants to projects across 180 countries. Whereas grantmaking before 2008 was simply based on submissions to different program categories, in 2008, the foundation switched to a model of strategic philanthropy. With this strategy in place, today, grants are awarded according to initiatives designed to address specific problems in art history, conservation, and museums. 
The Getty Foundation fulfills the philanthropic mission of the Getty Trust by supporting visual arts in Los Angeles and throughout the world. Through strategic grant initiatives, it strengthens art history as a global discipline, promotes the interdisciplinary practice of conservation, increases access to museum and archival collections, and develops current and future leaders in the visual arts.
The foundation relies on external managers to manage its assets. The role of the investment office is then to evaluate, select, and monitor the investment managers. The foundation allocates its endowment to a diverse set of assets.
Since 2007, the annualized return of the fund has been 6.74%. One noteworthy fact is that the foundation’s fiscal year ends at Jun-30, unlike most foundations that have Dec-31 as the end date. Thus, the brunt of the impact from events during 2008 and 2011 are reflected in the performance during the 2009 and 2012 fiscal years. In the long run, Yale achieved higher return than Getty.
On the financial statements, the asset breakdown is presented in a complicated manner. Below shows the asset allocation over 2010-2019. Over that time-period, the Getty Foundation decreased exposure from hedge funds, buyout funds, and distressed debt, and increased exposure to commingled domestic equity funds, as well as fixed income funds. This is at odds with the general trend of endowment allocation, where most foundations increased exposure to hedge funds and decreased exposure to fixed income and equities post-2008.
In terms of alternative investments as a whole, the foundation has steadily increased its allocation to alternative investments since 2006. The change was especially abrupt during the period between 2007-2008. Post-2008, the allocation percentage to alternative investments has remained stable at around 70%.
For its evaluation process, the Trust analyzes the portfolio companies’ financials and uses Excel spreadsheets to evaluate, among other things, revenue growth, earnings growth and changes in debt position. On the qualitative side, the Trust conducts calls with industry analysts, CEOs, and other professionals; and then prepares an investment memorandum detailing the investment rationale for the Chief Investment Officer.