The American Film Institute, museum of the moving image and gallery to the stars, is decidedly bicoastal, with one foot down lightly in Washington and the other more firmly in L.A. What comes of this long stretch is government by glitterati, bureaucracy with beautiful people, a lot of gravity with the glitz.

Bonita Granville Wrather, Oscar nominee, former "Lassie" producer and gala-giver extraordinaire, is the institute's chairman of the board. But Cochairman George Stevens Jr., a Washington-based, Hollywood-bred director, is the brand name around town. Stevens played founding father to the National Endowment of the Arts' founding mother and AFI was born. On Friday, the institute became a right-thinking 20-year-old.

Certainly nobody ever heard the moniker "Hollywood on the Potomac" before AFI moved into the Kennedy Center, built a movie house, struck up an agreement with the Library of Congress and began saving and showing old movies. Stevens saw the theater as a National Gallery of the Arts for film, a state-of-the-art auditorium for the Picassos of the projector.

Ironically, the house built to showcase "the indigenous American art form" is commemorating its 20th birthday with the opening of a European Community Film Festival. "The Birth of a Nation" seems more appropriate, but coordinator Lars Jahns said the festival is "an expansion of our original mandate -- showcasing the finest films in the state-of-the-art forms."

Stevens was offered the directorship of the fledgling institute in 1967, a position he held for 12 years before passing the torch to current director Jean Firstenberg. "We made the announcement on June 5, the morning the Six-Day War started, so we knew it would be an interesting journey," recalled Stevens.

The AFI today, he said, "is very much what we intended -- a rallying point for quality in film and television and the preservation of American film heritage." When it began, he said, "One half of all American films were lost, missing, or had been destroyed. We've rescued and restored 21,000 of those -- that alone would have been worthwhile."

While the Museum of Modern Art and George Eastman House had begun the rescue, there was no focused national effort till AFI, he said. Now it works in cooperation with MoMA, Eastman House, UCLA and other archivists, to salvage the classics. Recent accomplishments include the 1986 restoration of Frank Capra's 1937 "Lost Horizon" and the production of a short documentary using footage from Orson Welles' unfinished film "It's All True." Plans to complete the Welles film in total are in the works.

While preservation remains a priority, there has been a definite shift in emphasis under the leadership of Firstenberg, who came to AFI after being a program officer for a New York education charity. Not surprisingly, she has funneled energy and funds into the AFI's California-based Center for Advanced Film and Television Studies. Today, the AFI collection, largely housed at the Library of Congress, and the AFI Theater are about all that's left of the organization's diminishing Washington presence. The rest -- including the all-important education department -- have moved west.

"It's unfortunate, but not extreme," says Stevens. "We will continue to have a strong presence in Washington because the AFI is a national institution. To serve the entire country, it should be in Washington lest it become an extension of the film industry." Skeptics believe it is to be near and dear to the NEA, which supplies less than 23 percent of its $13.2 million in revenue.

Firstenberg, who expected to spend only 30 percent of her time in Los Angeles, said she finds she's out there about 60 percent of the time. This is due to the 1982 acquisition of a campus for the AFI's Center for Advanced Film and Television Studies. "Wherever you own something, you put down roots," she said. "And the acquisition achieved a stronger recognition in L.A."

It also, said naysayers who refused to be named, cost a lot of money; they accuse her of sacrificing the preservation of the past for the future filmmakers of America.

"Institutions grow, respond, adjust and redefine who they are and what they do, but the cornerstones remain consistent," says Firstenberg, citing the AFI credo, "preserve the heritage and advance the art. The facility was a major accomplishment to that end," she said, as was the school's accreditation by the National Association of Art and Design. When the center was refinanced under a California education bond, just like Stanford and USC, "that put AFI into a different category. It acknowledged what we had been growing into -- a jewel of a conservatory -- small, flexible and responsive."

The center is not a film school, but a post-film-school institution meant for "people who know that this is their life. They come to the AFI Center to become a true professional, devoted to the American indigenous art form," she said. "There's no R&D for filmmakers anymore. It used to be the B-movie. That doesn't exist anymore. TV should provide that window of opportunity, but it's even harder to break in there."

Both Stevens and Firstenberg glory in the strides AFI has made in creating opportunities for women. "There's been a breakthrough in the last 10 years," said Stevens, thanks in large part to the Directing Workshop for Women, whose graduates include Randa Haines of "Children of a Lesser God" and Lee Grant of the TV drama "Nobody's Child."

"It was apparent that there were virtually no {women} directors or producers and only a handful of women writers," said Stevens. "There was a fiction that film was a muscular outdoor activity that women weren't suited for. Women were welcomed at the center, but it was difficult for those who came out to find jobs.

"In the first year of the Center for Advanced Studies (1974), of 300 applicants only three were from women." Enrollment for females jumped from 25 percent in '86 to 33 percent in this school year. And, says Firstenberg, there is an enormous difference in the qualifications of the female candidates."

Through educating filmmakers, Firstenberg hopes to fulfill another AFI mandate -- the advocacy of film as art over commerce. "Twenty years ago I don't think people working in the moving arts felt comfortable describing themselves as artists. But film is the most popular, the most persuasive, the most influential art form man has ever created -- the literature of the 21st century. And that is an awesome responsibility; that's the mission of the center to teach responsibility in that regard, to give artists a sense of the power of what they say."

Firstenberg's detractors see the attitude as prissy, schoolmarmish and didactic. But none on the record.

In its second decade, AFI has widened its focus thanks to Firstenberg. "We were the first to start teaching video," crowed the unashamed techie. Other institutions sneered, but now they're playing catchup. "You have to take technology, use it positively. You shouldn't fight it. To that end, the AFI's National Center for Film and Video plans to come on line with a computerized catalog of all motion pictures in all archives. A national data base."

She is also a proponent of videocassettes, although the VCR revolution has killed repertory. "Rep may be dead," said Firstenberg cheerfully, "but exhibition is stronger now than at any other time in the last 20 years. And AFI has been responsible." People at other museums in other towns have copied us, she explained.

AFI repertory audiences are reportedly down, but she said, "We're satisfied. Sure, you'd like to have a sold-out house every night. We went through a down cycle. And are coming back up."

Commercial repertory houses like the Inner Circle have gone under which should have increased AFI audiences, though the theater gate remains about the same. Only pennies of AFI membership monies go toward maintaining the cinema with the purple auto body parts decor. The theater is nonprofit. "To break even, the AFI would have to fill up an unheard of two-thirds of the house every show," said local movie distributor Michael Jeck. "They've been the fabulous invalid for years but they keep on going."

Jeck, who has burned out on AFI after seeing 4,000 films there, named his company R5/S8 after the second best seat in the house. He belonged to a group that always sat in the fifth row, which is "as close as you can get without looking through somebody's head. The first row on risers."

Tom van der Voort , who calls himself an AFI aficionado, started going there when it was in the National Gallery. "I saw the first screening, 'The Wedding March.' And last night, I saw a Barbara Stanwyck double feature, 'The Violent Men' and 'Annie Oakley.' "

Van der Voort, who is on the staff of the Senate Appropriations Committee, a guy who should know his numbers, mind you, thinks AFI has "sort of fallen on hard times since it moved to the Kennedy Center {in 1973.} You have to pay a lot of money to park and the location is forbidding to average movie audiences."

Part of the problem, he added, is "they're showing so much product. And there's so much more going on in town than before. Last week I went to see 'Ludwig,' four hours of Visconti, at the National Gallery and they were breaking down the doors and sitting in the aisles."

To Washingtonians, AFI is the repertory theater, and to members across America, it is the magazine, American Film. The glossy, sometimes gushy, Hollywood happy rag was published here until 1985, when its staff, led by editor Peter Biskind, moved to New York. It is now run by MD Publishing for AFI and its new, nonprofit partner in the project, the Arthur M. Sackler Foundation for the Arts, Sciences and Humanities.

Biskind had long felt far from the heart of art in Washington, which Firstenberg also felt was the third best choice for magazine milieu, after L.A. and New York. "The magazine is more commercial now and has better access to writers, films and information," said the satisfied Biskind. "It was like a crap shoot in Washington. We've shortened the articles. They're not so much academically inclined. We were sheltered from the marketplace. Now we're more competitive.

"There's a lot of AFI material in the book, and there's no question of breaking off the relationship. It's critical to the magazine and vice versa. It's a two-way street."

"We chose New York because MD was here," he said, "and because we had the feeling that the pressure from the industry would be too great in Los Angeles. We didn't want to make it too Hollywood oriented. We didn't want that to swallow the independent filmmakers up."

MD had promised to double the circulation of what was already the world's biggest movie magazine (outside China), but it remains almost the same at about 140,000 -- the same size as the membership of the AFI. If you're a member, you get a magazine; if you're a subscriber, you become a member of AFI. "There's a direct-mail campaign that solicits both ways ... The results are the same either way," said Biskind.

There is a belief among regular readers that a cover story in "American Film" presages a bomb -- the May issue featured a defense of "Ishtar's" megabudget: "Now, $40 million is a lot of money ... Or, look at it another way: 'Ishtar' cost about as much as a couple of F16s. And whereas two F16s create employment for about three hundred people over a year's time, return nothing on the investment, will eventually be outmoded or destroyed in battle, and bring pleasure to no one. 'Ishtar' employed more than one thousand people (excluding extras) for varying periods of time over two years, may well bring a sizable return on its investment, will doubtless be around for years, and will probably entertain millions."

Enough said.

In addition, AFI gives out grants to independent filmmakers, administers an Academy of Motion Picture Arts and Sciences internship, gives out an annual Life Achievement Award (this year it went to Barbara Stanwyck) and maintains the Louis B. Mayer Library of scripts and movie references on the AFI's 8 1/2-acre Los Angeles campus.

In AFI's third decade, Firstenberg would like to expand its touring programs, host even more film festivals, and ideally, she'd like to open theaters all over the United States and "cinetexs" in all the major cities. But with funding problems, the last are pipe dreams.

"The future is in two areas," she said. "There's a whole new audience who have grown up in television, and not film. We have an obligation to reach, inform and give them a history of the moving image. And second, we are obligated to teach responsibility to the artists who are going to hold more influence than ever before over our society, our nation, our world."