The KITP is not a physics institute per se, but an institute for theoretical physics.
Asked to describe a scientist at work, people envision a white-lab-coat-clad person in a room filled with various apparatus. That is the image of experiment, the carefully controlled probe or inquiry into the nature of Nature.
Experiment is one key to the modern scientific method, pioneered five centuries ago by Galileo. The other key is theory. Physicists specialize in either experiment/observation or theory. Examples of theorists are Isaac Newton, Charles Darwin, and Albert Einstein.
The success of theory in physics dates from Newton, whose theory of mechanics and of gravity set the standard for theoretical physics for centuries---a concise mathematical framework that unified disparate phenomena, and had the power to make extremely precise predictions by means of which the theory could be tested and perhaps disproved.
Newton’s theory was an overwhelming confirmation of Galileo’s observation that “Mathematics is the language with which God has written the universe.” The growing relevance of ever more advanced mathematics to theoretical inquiries has contributed to the emergence of theoretical physics as a specialty.
The ultimate product of science is the understanding of Nature in terms of successful theory. Confusion about this role of theory in science occurs simply because in popular English language usage, the word “theory” is often taken to mean “conjecture” as “unproven idea.” What is actually meant in terms of the role of theory in science—and the KITP mission--is the “idea proven,” with the degree of confidence quantified.