Purpose Developed countries agreed at COP15 to pay US 00bn annually for adaptation and mitigation in developing countries. This paper aims to evaluate how prepared are donors and recipients to spend this money well by analyzing institutional and organizational capabilities for climate change adaptation in least developed country (LDC) administrations using the case of Nepal, a country which can be considered to be an archetypal LDC. Design/methodology/approach The authors conducted over 100 in-depth structured qualitative interviews with government officials from across the organizational chain in the ministries concerned with climate change, ranging from the lowest-ranked employee to just under the ministerial ranks. This was supplemented with detailed surveys of three representative communities from different ecological zones in Nepal. Data were analyzed using Ostrom?s IAD framework. Findings Local administrations are more motivated and capable than are given credit for by donors but nevertheless face critical barriers in being able to function autonomously and confront climate change challenges. These barriers create three interrelated challenges: An organizational challenge to create intrinsic incentives which empower and grant autonomy to front line agents, an institutional challenge to go beyond accountability-focused process validation and a policy-choice challenge which avoids the temptation to write aspirational policies without clear and feasible strategies to obtain the resources necessary for their implementation. Practical implications The findings point to ways climate assistance can be restructured for more reach and effectiveness. Originality/value This paper fills a gap in the literature because community structures and institutions have been extensively analyzed in the context of adaptation, but despite being criticized, administrative structures have rarely been directly studied.