Happy Hats. The cheerful, alliterative name itself brings a smile to your face, and that's just what Susan and Alireza Khorsand, founders of Glories/Happy Hats, intended when they started making these soft, colorful hats more than 2 1/2 years ago. Part jester's hat, part nightcap, they help hospitalized children combat the stress of their illnesses by giving them the freedom to act silly and "think happy thoughts."

With half a yard of brightly printed cotton fabric, multicolor ribbons and pompoms of every color and size, Susan has created a simple design that can be replicated easily by the various youth groups to whom she brings her Happy Hats workshops. Set up as an assembly line, the workshops teach teamwork as participants collaborate to produce the finished hats.

Susan developed the hats with input from the pediatric oncology staff at Fairfax Hospital. The hats, made in three basic sizes, fit over all types of bandages and drainage tubes. "We also needed a design that would be easy for kids who had never used a sewing machine," Susan says. "We want this to be their project, and we want them to succeed, without handing it to them on a silver platter."

With more than 1,000 hats distributed to more than 15 hospitals in Washington, Virginia and Maryland, the Khorsands have succeeded in launching a project that had its roots in their shared desire for helping others. A milliner by trade, Susan decided to apply the skills she'd honed in theater productions to a more worthy project.

By involving youths in Happy Hats, the Khorsands hope to send a supportive message to children who may be experiencing their own difficulties. "Kids learn they're dependent on the people in front of them in the assembly line and the people behind them, each other. This is what happens in a community: We learn that we all depend on each other," Susan says.

The Khorsands have applied this formula of self-awareness and community involvement in settings ranging from a 4-H camp for at-risk children to a Martin Luther King Day celebration for residents of homeless shelters. Girl Scouts at all levels, church groups and after-care programs have made hats. Last spring, Susan offered an afternoon workshop for girls in Sisters Alive, a group that targets 9- to 14-year-old girls from struggling families, and an evening program for teenagers in a confirmation class at a middle-class Jewish temple.

Happy Hats' emphasis on helping students give back to their community has proven especially appealing to Beverly O'Bryant, director of the community service and service learning programs for the D.C. public schools. O'Bryant coordinates efforts to fulfill the 1992 D.C. Board of Education mandate that all high school graduates complete 100 hours of community service.

"Happy Hats gives students a sense of accomplishment," O'Bryant says. "You don't have to be an A student to feel really wonderful about the service you are providing. Students can feel creative while they are giving something to the community."

Melvin Moore, a junior at Benjamin Banneker Senior High School, enjoyed the creative aspects of Happy Hats. He made a hat as part of the service learning component of his art class. "Susan explained how each color can have a special meaning, just like when a painter chooses colors to make a portrait," he says. He chose a flower print for his hat, adding star shapes and pink, yellow, white and green ribbons.

"Lots of times children in the hospital have to stay in their rooms," Moore says. "I wanted to make a hat that would let a child dream about playing in an open field on a spring day." He and his classmates delivered the finished hats to pediatric oncology patients at Howard University Hospital.

Teacher Gloria Taylor sees a compassionate side of her students when they make Happy Hats as a service learning activity at Eastern High School. Taylor, who teaches clothing and textiles, uses Happy Hats to reinforce basic sewing skills and to teach about teamwork and mass production. "Students easily understand the process of Happy Hats," she says. "But the activity also moves beyond the physical work and pierces the spirit."

Rabbi Tracy Klirs, director of education and youth at Agudas Achim Congregation in Alexandria, saw Happy Hats as a another opportunity to help young teens in a confirmation class understand the concept of tzedakah, which translates as righteousness and emphasizes "action taken to improve the lives of others."

It's the connection between sick and well kids that makes Happy Hats especially appealing to Debbie Casolari, coordinator of child life services at Walter Reed Army Medical Center.

"These are children who often don't get a chance to do something for others," says Casolari, who distributes hats at scheduled hospital parties. "It's not just a charity group making hats for sick children but a way of providing a source of pride for kids, who can really put their heart and soul into the hats."

Casolari calls Happy Hats "child-friendly," and enjoys watching children pick out their hats. "They're a little tentative at first, but when they see doctors and other kids wearing them, they get these big smiles on their faces and put on their hats. It's a time when they don't have to worry about who's going to poke them next or what procedure is about to happen."

The Khorsands don't charge either the hospitals that receive the hats or the groups offering workshops for their services. While Happy Hats was started with their own money, they have attracted corporate sponsors and donations. Chenille Kraft regularly sends glitter poms, and Offray Design Ribbons contributes the ribbons. They have received donations of fabric from WalMart, as well as funding from Fresh Fields, Borders Books and Jo-Ann's Fabrics. Finished hats are marked with hang tags provided by corporate sponsors.

Still, the Khorsands seek grants and donations that will allow the organization to move into an office, where they can hold workshops and teach others how to spread their message of community involvement.

The Khorsands emphasize that Happy Hats not only help sick children feel better, but they can have a positive impact on their creators. "The hats are silly, and sometimes they're sewn crookedly, but that's not the point," Susan says. "We have kids following us out to our car as they sew on that last pompom. It's a positive experience, and they don't want it to end."

For more information: Susan and Alireza Khorsand, Glories/Happy Hats, 2847 Fairmont St., Falls Church, Va. 22042, 703-560-3030, gloriesinc@aol.com

CAPTION: "The hats are silly . . . but that's not the point," says Happy Hats co-founder Susan Khorsand, here with a behatted youngster.

CAPTION: Happy Hats are worn by patients at Children's Hospital during a Starlight Children's Foundation party sponsored by PriceWaterhouseCoopers earlier this year. Volunteer Nadine Wormsbacher, left, helps one child check out his hat.