What to do with a small NGO? Need help to figure out next step

Typically you need to get funding and that will come from outside of Nepal. If it is US funding then they will want you to have a US501C3 so they can write off their taxes.

Very little funding coming from in country..

Totally agree. Very difficult if not implausible to raise any meaningful amounts of money within Nepal no matter how good the cause may be, and very easy to raise money in the good old USA using a duly registered 501(c)3 vehicle, exactly as you indicate. Going a step further, I think that the two charitable organizations, in this case one being nepali and the other american, could bear similar if not so dissimilar names - why not? In my view the great advantage of that type of set-up is that the board of directors of the US parent, would this way, always be 100% sure they retain full and unequivocal vested control of any and all donations, finances, and funding to be allocated in well specified amounts for any one clearly designated/well specified project A, B, or C in Nepal. In plain English, the members of the US charity would always be the ones who monitor operations, effect dollar transfers to their brothers and sisters in Nepal as when needed or decided on etc.   
Why one may ask is this so important? The answer resides in the fact that to the best of my knowledge, and unless the rules for NGO's in Nepal have been modified recently (which I would not know about), all 7 (or more) members of any Board of Directors in Nepal must all be nepali citizens, to the exclusion of any foreigner. If those rules are still in effect, in practical terms, this means foreigners have no voting power at board meeting decisions on Nepali soil.
I think you get my point. To be on safe side, suggest matter be checked out with a nepali lawyer, who can give update.
In the case scenario I cited here, the american board would exercise strict control over the overall finances/funding in the States as a result of monies raised there, while the all-nepali board of the NGO in this country would have the responsibility for properly dispensing funds re-allocated to them locally here, in favor of their brothers and sisters.

Yes, clear distinction should be drawn between the international entity called INGO and the local NGO, the first one being an advocate while the second one is a direct service provider. This is especially appropriate not to say relevant to Nepal, a country where between 1977 and 2017, official statistics of SWC (Nepal Welfare Council) reveal that there were no less than 39.759 NGO's registered here. Not so long ago, the Ktm Post ran an interesting article on this subject headlined "Revisiting the NGO Numbers Debate" where they hypothesized that their total number could in fact prove to be much higher to 2 1/2 times that number, as many as 100.000, they wrote. And despite all that, Nepal remains one of the poorest and least developed countries in southeast Asia. Food for thought.

Your point is well taken. Nepal is the country with the highest density of I/NGOs in South-East Asia.

Back to the main thread, it's comforting to read that the small NGO described above does many good things like planting trees here in Nepal. We wish them well in their expansion plans. Let's be honest, somebody needs to plant a bumper crop of trees, a gogo, with no time to lose, the reason being that in connection with the proposed building of that much heralded second International Airport in this country, the Environment Impact Assessment Report (EIA) is now mentioning the "cutting down of over 2 million small and large trees" - they say - in that one airport project area alone. Good for aviation/transportation prospects, no doubt, but hardly good news for the environment, if that happens.

I believe it's 2.3 million trees they are talking about cutting down, only 25 kms away from Lumbini, Lord Buddha's birthplace. Deforestation on such a massive scale will not help this beautiful country, that's for sure. NGO's to the rescue.

Great comments and encouragement. Yes, a foreigner has no power with the NGO. It's almost impossible to get people in Nepal to become involved unless they are paid or directly benefit, which I do understand. However, they want more than average pay when a tourist is involved. Being like this they undermind the project and it fails.
I ended up giving the guesthouse back to the landlord and have the furniture. Such a relief.
If anyone would like to use our little NGO for a project I'm fine with not taking any money. I'd just like to see the little agency being used to help Nepal. A person could even write a grant proposal and head up the project. Just send me a PM if you have any ideas you'd like to work on.

Re your use of the term "PM", I must share this little anecdote with you. Believe it or not and maybe it's because my english is not so good, but I just didn't know what those two little letters meant! Being curious, I had to look it up and learned something. Whatever, please do not think I am being critical or sarcastic in any way.
I now know what you meant by your use of the term "PM" but at first, I thought:
- p.m. Afternoon? can't be that
- Prime Minister, doesn't fit
- Post-mortem, certainly not!
But then, what does she mean by PM? You will laugh because by going to the net, I learned that this acronym has no less than 196 different meanings including and not limited to:
- Panama - Power Management - Per month - Project Manager - Price Match - Paul MaCartney, can't be that  -  Property Management - Program Manager - Paramedic - Particulate Matter - Power MacIntosh (Apple) - Phillip Morris - Priority Mail - Pacemaker - Portfolio Manager - Maximum Power - Palma de Mallorca - Postmaster -  Push me - Prime Mover - Power Monitoring - St Pierre et Miquelon - Policy Manual  - Performance Meeting - Precautionary Measure - Personnel Manager - Paymaster - Printed Money - Play Money - Program Memory and .....even

                                          Phone Me!!!!!!

not to mention some 100 other acronyms for the same two little letters.

It just goes to prove that one is never too old to learn something new!!!!
(the joke is on me!!!) - Next time I will know it it's Private Message or Personal Message or something along these lines!!!!!......
Don't mind me!!!