An advisory panel to the National Endowment for the Arts will officially recommend tomorrow that the D.C. Commission on the Arts and Humanities be given the $295,000 grant it was denied last May because its application did not meet Endowment criteria.

The recommendation must still be approved by the Endowment's advisory arm, the National Council on the Arts, which yesterday began a three-day meeting here at the Capitol Hilton. Final approval must come from Arts Endowment Chairman Livingston Biddle. But the main hurdle for the D.C. Commission was the panel, which reviews all applications from state art councils.

At its meeting yesterday, the National Council on the Arts voted to fund a new national pilot program setting aside $1.5 million in challenge grants to small, community-based minority theaters, performing groups and visual art programs, and to provide them with free consulting services.

"We want to get the cream of storefront theater out of month-to-month survival," said Arts Endowment official A. B. Spellman who helped to develop the program.

The program, according to endowment officials, will make grants of no more that $100,000 to a small number of organizations, generally those which have difficulty raising money, and which have "quite small" annual budgets of $100,000 to $200,000.

The groups selected must then match their grants (through fund-raising and earned income) with three times as much money over the course of three years. After about a year and a half, the program will be evaluated and possibly expanded.

One official of the advisory panel on state funding had nothing but praise for the revised application submitted by the D.C. Commission after the earlier denial. "The difference was like night and day," said Henry Putsch, director of the panel. "It was organized, coherent, professional and it specifically addressed all the criteria we wanted."