IN CHARLESTON they say that Gian Carlo Menotti keeps the rain away during the Spoleto Festival. So far -- and the fourth annual festival ends today -- unless it rained in Charleston during the last five days, Menotti's record is unspotted.

For four years, Charleston has opened its homes, its theaters and its hearts to the visitors that throng its streets for the annual 17 days of feasting on music and theater. You cannot walk a block without being greeted with the friendliest "Hello, how are you?" from someone you have never seen before. The city jumps with all kinds of excitement: The famous iron fences that surround some of its handsomest squares and parks are hung with water colors, oil paintings, etchings, lithograhps and photographs, or you can have your portrait sketched on the spot. Brass quintets play from the porch of the historic Dock Street Theater, a harpsichord can be heard through an open window, or a group of folk dancers may suddenly materialize on a quiet street. It is easy to see why Menotti, after taking one look at Charleston several years ago, said, "This is the place for the Spoleto Festival in the United States," modeled after his Italian festival.

In the ensuing years the festival has become the No. 1 festival of the arts in this country, rivaling anything to be enjoyed in europe's summer festivals. The quality of performances in every artistic medium is extraordinarily high, thanks to the presence of many of the world's top artists, whether a senior pianist like Rudolf Firkusny, or the brilliant young tenor Robert White. And the Spoleto Festival in Charleston has matched its artistic growth with remarkable financial responsibility. The budget for this year's festival is a bit over $1.5 million, of which more than $600,000 is coming in at the box offices. Support for the big project has come from the City of Charleston, the State of South Carolina, the National Endowment for the Arts and such private generosity as that of McDonald's Holiday Inns, General Dynamics, Mobil, banks and others.

This year the festival, beginning on May 23, scheduled 31 performances of five operas: Menotti's beguiling children's work, "Chip and His Dog," written for the Canadian Children's Opera Chorus in 1979; Bellini's "La Sonnambula," starring Gianna Rolandi; "Transformations," by Conrad Susa; and two dazzling French operettas: "Le Docteur Miracle," by Bizet, and still brighter, "Monsieur Choufleuri," by Offenbach. Both of these were staged by an Italian genius named Giulio Chazalettes, who lets them romp nonstop for just under an hour each. Menotti's "Chip" is so alluring that an extra performance had to be added to the eight originally announced. Performed entirely by children, it includes one of opera's juicest roles, that of Chip's dog, whose full name is Gregory Alexander Lafayette. This role, which is shared by Biemann Othersen and Joe Shahid, has created two new stars of the Spoleto Festival. "They give interivews just like the rest," Menotti said in delight, pleased that boys who spend a half-hour completely concealed in a doggy costume can become celebrities, thanks to his story and music.

Susa's surrealist opera, one of the most discussed works of the festival, is a smart satire based on several Grimm's fairy tales. It would be a perfect addition to operas we have seen in the Terrace Theater.

The operas make ideal use of the theaters whose facilities helped draw Menotti to Charleston. The French pieces play perfectly in the Dock Street Theater, which dates from the early 18th century."Chip" is at home in the initmate, homely converted barn called the Footlight Players Workshop. "Transformations" looks right at home in the Garden Theater, a movie house with good stage space and adequate acoustics, which is also used for the film retrospectives that are popular in Spoleto-Charleston. This year's is of Orson Welles.

There was chamber music everywhere at the festival: Haydn after hominy grits and hot jazz with she-crab soup. Even in this musical heaven, Washington's own Twentieth Century Consort emerged as angels of the highest order. At the second of their two programs, the Consort performed George Crumb's "Song of the Humpbacked Whale." The auditorium of the College of Charleston was immersed in total darkness, with a dim blue light shining on the scores. As flutist Sara Stern began her heart-rending sound the audience and the players seemed suspended in time and space through the very last pantomine phrase.

Not all was modern. Apula Robison, in one of the two-a-day chamber music concerts in the Dock Street Theater, brought down the house with her flute playing in a Weber Trio, in which her Rossinian madness had cellist Stephen Kates and pianist Yefim Bronfman smiling at the end. Bronfman was one of two young pianists who, created a sensation at the festival, bringing both majesty and patience to excerpts from Messiaen's "Vingt Regards." Ira Levin became an instant idol of the Spolentini with his innocent and touching interpretations of Chopin.

One of the brightest attractions in Charleston, as he has been throughout the history of the Spoleto Festivals in Italy, is pianist Charles Wadsworth, the music director of the Lincoln Center Chamber Music Society. In both cities, he takes the audience inside the music they are about to hear, in monologues that easily equal Victor Borge's. One day, after Robert White had finished a stupendous performance of what may well be the most difficult aria anyone has ever sung (from an opera by Steffani), Wadsworth walked out on the stage, looked the audience in the eye, and said, "Bet you can't do that!"

Dance companies in Charleston this festival included Alwin Nikolais' Dance Theater, and the Maria Benitez-Estampa Flamenca troupe as well as the stars of the Dance Gala. Arthur Miller's latest play, "The American Clock," enjoying its premiere, was sold out long before the festival opened and could only offer the possibility of standing room to hundreds of hopefuls.

While all of the official festivities were rolling along, there was a new dimension to this year's programs. In the past, a group calling itself Picolo Spoleto operated simultaneously with the big attractions, very much like the Fringe at the Edinburgh Festival and off-Broadway productions. This year Piccolo Spoleto has become a regular adjunct of the festive weeks. With the blessing of Mayor Joseph P. Riley, Jr., who said, "The program takes the 'spoleto Experience' to those who would not otherwise be able to enjoy the festival," the Piccolo Spoleto published its own handsome brochure listing more than 100 events -- concerts, dance recitals, organ programs, choruses, poetry and visual arts attractions, jazz and children's programs. These are given in churches, libraries, museums, auditoriums and college facilities that are spread across the city.

Under Piccolo Spoleto auspices, Ernest Bloch's Sacred Service was performed five times in Temple Beth Elohim, one of the oldest active synagogues in the country. It received a notable performance that was only part of Charleston's celebration of Bloch's 100th anniversary.

Another example of the value of Piccolo Spoleto took place at the College of Charleston on a Saturday at noon where an excellent young Charleston pianist, Douglas Ashley, played a program of music by Ruggero Lolini, Lili Boulanger, Louise Talma, Arthur Cunningham and David Maves. The latter's Theme and Variations is a striking new work that is something of a panorama of 20th century piano technique that is also grateful for audiences. In Ashley's authoritative playing it made a convincing debut.

There was jazz and folk music throughout the festival: Sarah Vaughan and Mary Lou Williams gave a joint concert, and Scott Nickrenz, a superb violist, demonstrated an amazing versatility by taking charge of the country music concerts that drew wildly enthusiastic crowds to the Cistern. Not all the jazz was outdoors. For those who were still ready for more after midnight, Bobby Nesbitt, a smart pianist with all kinds of style, made the intimate upstairs room of the King Street Garden and Gun Club one of the favorite rendezvous spots.

Menotti is already planning for next year, which will bring his 70th birthday and the fifth festival in Charleston. He would like to see his full-length play, "The Leper" given its first professional staging in this country -- it is being done in Spoleto, Italy, this summer. He also hopes for a revival of his opera "The Last Savage" and performances of his new "Mass."

Charleston is expanding in ways that are directly tied to the Spoleto Festival. A new luxury hotel is planned to replace an old office building on Market Street that burned last winter. An even more dramatic example is already a flourishing success: Over on East Bay Street, not far from where "the Ashley and the Cooper Rivers join to form the Atlantic Ocean," there is a new restaurant called the East Bay Trading Company that is blessed with the best she-crab soup in the city. It was built inside an old five-story warehouse. You are served on the ground floor or any of three more floors that rise in tiers, reached by a glass-covered elevator that carries you to the top. A huge skylight covers the entire structure, reflecting the scene below at night, and also letting you see the sky above. It is a grand renovation job and a restaurant that offers great seafood, good wines, excellent service, and a feeling of old and new Charleston that goes hand in hand with the Spoleto Festival.