THE annual Washington Folk Festival, which will be held tomorrow and Sunday at Glen Echo Park, started out seven years ago with a sure sense of its performers but only a hint of its potential audience. The Folklore Society of Greater Washington, organized in 1964, long had been presenting monthly public concerts and weekly house concerts of traditional music and had just put on two successful mini-festivals at the Washington Ethical Society Auditorium.

"We'd had a good turnout, about 500 people," says Debbie Hutton. "But we couldn't publicize anything because too many people might show up. If there turned out to be an audience, where would we put them?" The solution lay in Glen Echo Park, the former amusement park that had been converted into an arts and crafts center. Hutton and fellow organizers Mia Gardiner and Jonathan Eberhart gathered together several dozen performers focusing on traditional aspects of international and American culture, set up three stages in existing park structures and hoped for the best. Praying for a crowd of 3,000 to 4,000, and willing to settle for as few as a thousand, they wound up with 12,000 visitors, a number that's jumped each year to as many as 25,000 over two days. This year, the free community celebration will feature almost 600 singers, dancers, musicians, storytellers and craftspeople in concerts and workshops spread out over five stages.

Already there are two major folk events held here each summer, the American Folklife Festival on the Mall and the National Folk Festival at Wolf Trap (now on the road); both feature out-of-town performers. "But we knew that we wanted it to be for Washington musicians and dancers) only," says Hutton. "There are so many good ones around."

The Festival operates on a minuscule budget ($3,000, most of which goes to printing programs and feeding performers and volunteers) and depends on the services of up to 150 volunteers who start putting the program together in January. Local businesses contribute many goods and services and the performers all work without a fee. The Festival is also well-organized. "This year we're making plans for rain and we have alternate sunstages," Hutton says cheerily (the free festival goes on rain or shine).

Washington, being a crossroads of the world, has a tremendous wealth of ethnic components and Gardiner and Eberhart spend a great deal of time searching out the international participants in the city's immigrant and refugee enclaves. Gardiner says she meets "a lot of people during the ordinary course of life--neighbors, friends of neighbors, coworkers, going to parties and looking for an accent. I've gotten so that when I hear an accent, I automatically say 'Where are you from?' And it doesn't take very long to get around to asking "Do you know any people who play the music of your country?' "

Other sources of participants include embassies and cultural associations, "going to events like Latin American festivals or Asian Days," performers recommending other performers, exchanging names with other festival committees. "Looking around is the funnest and most spontaneous way," Gardiner says. This includes being all eyes and ears in taxicabs, stores ("you involve your family and friends--if you hear an accent, ask") and restaurants. "We've had lots of fun over the years going to restaurants, our excuse being that we'll go and eat this new food and then ask if they know any musicians. We found an Ethiopian musician this year because his tape was playing in a restaurant."

"And we have target countries," Gardiner says. "My husband challenges me: 'let's see if you can come up with a tango thing from Argentina this year.' And guess what: I did! I have a lot of fun thinking of countries whose music hasn't been represented yet and going out and looking for it using community resources."

Festival organizers sometimes have to be conscious of possible political and cultural antagonisms (such as Turkish-Kurdish, Soviet-Afghan, or Arab-Israeli) and try to make sure these groups are not presented sequentially or on adjacent stages opposite each other. They also have to be aware of inner country politics, since groups of exiles or refugees may be at extreme ends politically or socially. But that's a minor consideration compared to the joy of discovering the cultural flavors that abound in Washington. "There are so many wonderful musicians and countries out there, we can go on doing this for a long time," says Gardiner.

The Festival also has encouraged the maintenance of diverse cultural traditions: for instance, they have moved away from having dancers performing to tapes, encouraging them to find live musicians. "And so new groups have been formed," Gardiner says, "and that's really neat."

"And you meet a lot of wonderful folks. It's wonderful to see people from six different countries sitting around talking or sharing a meal. That's kind of what the festival is about. The people are from all over the world, but they're also from Washington. We all live in the same town."

The Washington Folk Festival will be held on the grounds of Glen Echo Park Saturday from noon to 10 p.m. and Sunday from noon to 6 p.m. There will be continuous performances and workshops on five stages, including folk and square dancing, with craft demonstrations as well. All events are free.