Chapters, the downtown D.C. literary bookstore, celebrated its 20th birthday yesterday evening. Champagne was drunk. Words of praise were offered. The place is not just "a terrific, splendid bookstore," said novelist Howard Norman. It's a reprieve from "the bombast and confusion" outside its doors. "Long, long, long may it reign."

That's the good news.

The bad news for Chapters, co-owner Terri Merz said, is that without help -- in the form of a fundraising drive that will allow it to be bought out by a nonprofit foundation -- the bookstore may have trouble making it to 21.

The strategy, Merz said, is similar to that employed by the Avalon Theatre Project, which succeeded two years ago in reopening Washington's oldest surviving movie house by converting it to nonprofit status.

Merz and her original partner, Robin Diener -- a pair of French majors fresh out of Georgetown University -- founded the bookstore in 1985. (Diener left in 1998, with Steve Moyer replacing her as Merz's co-owner.) The partners planned to sell a carefully selected inventory of quality books, with an emphasis on poetry and fiction but including a range of nonfiction titles aimed at the serious general reader. Hosting literary readings would be a major part of the enterprise.

The new venture was met with considerable skepticism.

"Everybody said, 'You can't sell these kinds of books downtown,' " Merz recalled before the party. She also remembers Bobby and Herbert Haft, then the owners of Crown Books, coming in to scope out her store, and finds it gratifying that Chapters is still here while the Crown chain is not.

Much has changed for booksellers in the past two decades. Merz ticked off some of the more obvious developments: There's the dramatic decline in the reading of literature, as detailed last year in the National Endowment for the Arts survey Reading at Risk. There's the rise of what Merz called the "predatory" national chains. There are online retailers such as

Many of the independent bookstores that have survived, Merz said -- such as Politics and Prose and Olsson's -- have done so by getting quite large themselves. Others, such as Lambda Rising, focus on niche audiences. But Chapters has remained committed to its small-and-select general interest strategy.

Two years ago, Merz and Moyer moved the store from 1512 K St. NW to its current location at 445 11th St. NW in the booming Penn Quarter. They felt strongly enough about staying downtown -- and about what they saw as their unique approach -- that they proceeded despite the presence of a Barnes & Noble a block away.

"Oh geez, did they really?" said John Mutter, whose online newsletter Shelf Awareness tracks developments in bookselling. "That's probably the most difficult thing I can imagine."

Mutter said he is not aware of other bookstores that have successfully executed the kind of nonprofit strategy Chapters is proposing, though he noted that supporters of Kepler's Books and Magazines, a large independent in Menlo Park, Calif., are considering something like it to reopen that 50-year-old institution.

Mark Poerio, a D.C. attorney who has been advising Chapters pro bono, explained how the proposed nonprofit arrangement would work. Chapters would be sold to an existing nonprofit foundation -- known as a 501(c)(3) -- called Wordfest, which Merz and Moyer set up in 2001 mainly to sponsor the D.C. International Poetry Festival. In order to pursue the purchase, Wordfest would need to raise about $80,000, which would be applied to Chapters' current debts and future operating expenses. Merz said she is hoping for $50 contributions from 1,600 people.

Once the purchase is complete, any money Chapters netted would go to Wordfest to foster artistic and literary activities such as the poetry festival.

But no one involved is expecting those sums to be huge.

"Steve and I don't do this for our health or for our wealth, believe me," Merz said with a laugh. "Chapters at the bottom line is a public service," as well as a labor of love.

Then she made a cinematic analogy. They're just like the parents in "March of the Penguins," she said, "rolling that little egg across the ice."