The Capitol Ballet has been awarded a $150,000 advancement grant by the National Endowment for the Arts.

The grant -- which must be matched with three times that amount in private funds -- could mean the salvation of the critically acclaimed but financially troubled local company. But it has arrived at a particularly difficult time: The group is still adjusting to the recent loss of assistant director Keith Lee, and the prospects for fund-raising are uncertain.

Company officials concede that they have little hope of raising the entire amount -- $450,000 -- necessary to get the full $150,000. "I would guess we could match $60,000 to $70,000 of the grant," said Calvin McCants, a management consultant whose New York-based firm -- Michael Washburn and Associates -- is under a separate grant from the NEA to work with recipients of NEA advancement grants.

The grant money would be used to maintain the eight dancers now in the company and hire another four. The Ballet also plans to hire a general manager and a full-time administrative assistant, and increase the series of performances to seven or more for next season. Three or four sets of performances are planned for this season. The last was in October and the next is scheduled for January.

Since its founding in 1961, the Capitol Ballet has had a reputation for successfully training young classical ballet dancers -- particularly young black dancers who have had few opportunities elsewhere. The company is generally considered a valuable asset in the community, but has been plagued by severe financial troubles recently. Last year, it had to lay off dancers from January to September to save money to pay a $30,000 debt. The D.C. Commission on the Arts gave the group a $5,000 emergency grant last March to help keep it from closing.

In October, after the last performance, the company laid off three of 12 dancers, and another left because of injuries. "We had to let some go for financial reasons," said founder and artistic director Doris Jones, "but we'll rehire as soon as we can. Twelve is really the smallest number we can work with." The eight remaining dancers are currently laid off, but director Doris Jones says that's part of their contract. They will report back to work in January.

Last month the company lost its highly regarded assistant director, Keith Lee, a former American Ballet Theatre soloist. Lee says he resigned. Jones says he was "let go" by the board. "If Keith Lee doesn't stay," said one knowledgeable art-community observer, "I would worry not just about whether the Capitol Ballet could match their grant but whether they could stay together."

"I don't want to say anything to hurt the Ballet," said Lee. "but the Capitol Ballet Guild [the board of the Capitol Ballet] is not a professional one. I don't know how they can think they're a professional company, unless they learn how to raise money and do things like that."

Jones said the board let Lee go because of differences between Lee's and the Guild's goals for the company. "We've always been a classically trained company," said Jones. "I don't know how classical Keith wanted to go. I'm trying to find someone to come in and assist me.It isn't going to be easy -- but nothing has been easy for us." Jones said that Lee's departure will not damage the group's ability to raise funds.

"Whether or not they can raise the money depends entirely on the kind of board structure they can pull together," said Mildred Bautista, executive director of the D.C. Commission on the Arts. "They had a good one in the past under Delano Lewis [a C & P Telephone Co. executive who has been very active in the local arts community]. But if that structure is not in place, it will be very difficult to raise money." The ballet -- which had also received a regular grant from the D.C. Commission -- must report to the Commission at the end of this year on how they used the money.

The NEA grant to the Capitol Ballet was one of 15 such national awards announced yesterday for promising community arts organizations. Technically, each organization is eligible for $150,000 a year for three years -- provided they can match the grant three-to-one. But so far the Congress has only funded these NEA grants for one year.