Ballet West's receipt of a $500,000 challenge grant from the National Endowment for the Arts has given the company a psychological shot in the arm.

This largest-ever federal grant to a Utah arts organization was awarded under the Endowment's new Challenge III program, whose goal, according to NEA chairman Frank Hodsoll, is "to initiate major projects that can move this nation forward to greater cultural achievement."Ballet West won by submitting a plan designed to "access" outlying communities in eight Western states - Utah, Arizona, New Mexico, Colorado, Idaho, Wyoming, Montana and Alaska. Through a unique "hub and spokes" arrangement, full company performances would be given in urban areas, combined with split company touring to outlying communities.

"Viewers in small communities will thus see not a `Ballet West II' made up of apprentices, but a first-quality program with half the company's artists," said artistic director John Hart. "Performances will be less elaborate, but with high professional standards."

General manager Trevor Cushman hails the project's potential for increasing dancer employment to 52 weeks within a short time (it now stands at 46 weeks). He hopes to raise much of the $1.5 million needed in matching funds over the next four years from corporations outside of Utah, which do business in two or more of these Western states.

Meanwhile, Ballet West is on the road this week, doing one of the things it does best - touring America.

Following up its critically acclaimed performances of "Giselle" in Art Park near Buffalo, N.Y., in early September, the company is appearing between Oct. 3-Oct. 17 in Dartmouth N.H.; Burlington, Vermont; Binghamton and West Point, N.Y; and Ann Arbor and Detroit, Mich.

Following a variety bill in Salt Lake Nov. 9-14, BW will take its "Nutcracker" to Spokane, Wash., Dec. 2-4, and San Antonio, Texas, Dec. 9-10. Tickets for the November concert and the Salt Lake run of "The Nutcracker" Dec. 14-28 are now on sale at the BW box office in the Capitol Theater, or through Smith'sTix. - Dorothy Stowe