Getty endowment declines 25%; Getty chief announces hiring freeze
Even the wealthy Getty Trust is hurting in today's bleak economy.
In an in-house memo addressed to "All Getty Staff," Getty Trust Chief Executive James N. Wood warns that the Getty is facing "a difficult period ahead" because the value of the Getty endowment, which ended the 2008 fiscal year at $5.98 billion, has since that time declined "roughly 25%."
Wood writes that the decline calls for the Getty to "significantly reduce spending in its fiscal year 2010 budget, "which will have an impact on staffing, programming and operations. ... I have asked our management to freeze all hiring. Any requests to replace positions will be subject to my review. I have also asked that promotions and salary adjustments be halted so that we are not adding costs at a time when we need to take steps to ensure the Getty's future budgets are in line with our income."
Read the full memo, obtained by The Times, after the jump:
-- Diane Haithman
Photo: James N. Wood. Credit: Ricardo DeAratanha / Los Angeles Times
All Getty Staff:
I want to provide you with an update on the Gettys current financial situation and set expectations for what is likely to be a difficult period ahead, particularly given current economic conditions and uncertainty over when we may start to see a turnaround.
Let me begin by stressing that the Gettys endowment is managed prudently, with careful oversight. But the Getty has not been immune to the steep decline in financial markets which has affected so many of our peers even more seriously. Our endowment ended the 2008 fiscal year at $5.980 billion and, since that time, with financial markets deteriorating further, the value of the endowment has declined roughly 25%.
Looking ahead to fiscal year 2010 we can see that the losses our endowment has suffered will be reflected in declining budgets. In the New Year, as we prepare the Gettys FY10 budget, it is essential that we significantly reduce spending, which will have an impact on staffing, programming, and operations.
I realize that when we met last May to communicate the changes that resulted from our strategic planning process I said we had made difficult decisions that I hoped would preclude taking further action in the future. However, no one could have foreseen then the severe downturn in the economy that began to manifest itself in late summer, and no one can accurately predict when a recovery will begin, or how long it may take to regain the losses our endowment has suffered.
Therefore I have asked our management team to freeze all hiring. Any requests to replace positions will be subject to my review. I have also asked that promotions and salary adjustments be halted so that we are not adding costs at a time when we need to take steps to ensure the Gettys future budgets are in line with our income.
The Getty is a strong institution. With prudent planning and decisive action we will weather these challenging times, but unfortunately not without some hardship. I regret that this is the news I must share with you in this holiday season, and particularly at the conclusion of a year of such accomplishment for which I owe each of you so much. However, I believe that it is essential to share the facts as they are. As we move through the 2010 fiscal year budget planning process, I will promptly share with you the decisions we make.