Under pressure to spread out its budget, the National Endowment for the Arts says it will fund more groups and projects this year by giving out smaller grants.

Congress appropriated $98 million for the NEA for the fiscal year that ends Sept. 30, down from a peak of $176 million in 1992. President Clinton has asked for $136 million for the 1998-1999 fiscal year.So far this year, the NEA has awarded 228 grants of less than $9,000, compared with 45 of these low-level grants throughout fiscal 1997.

The smallest grants are usually $5,000, like the one to Seem-To-Be Players Inc. of Lawrence, Kan., to help with a 14-state tour of an original play for middle school students, or the one to Ballet Expanol in Louisville, Ky., to help sponsor a flamenco festival.

Grants between $10,000 and $24,000 total 414 so far this year. The Art Institute of Chicago got $15,000 to study films about African Americans. There were only 257 grants in that range during 1997.

But there are still larger grants, too, like $350,000 to increase the endowment of the Museum of Contemporary Art in San Diego.

Congress decided that 40 percent of grant funds must go to state art agencies, up from 35 percent last year. The California Arts Council is getting $886,600.