REDD+ has the potential to reduce greenhouse gas emissions, meet climate stabilisation targets and protect biological diversity. Consequently, millions of dollars are being channelled into developing countries rich in forests, for pilot projects that will provide data for the design of REDD+ projects that are based on incentives and performance. This paper evaluates the impacts of REDD+ pilot projects on community forests and associated user groups (CFUGs) in Nepal. A field study targeted eight CFUGs that participated in a REDD+ pilot project funded by the Forest Carbon Trust Fund in Nepal. The pilot project increased the participation of Dalit, Indigenous people, women and the poor, and was able to provide some social safeguards. However, when all the additional costs and foregone benefits of the project are considered, REDD+ is not an attractive market-based option for Nepalese CFUGs. A better approach would be a bilateral or multilateral approach that is not market based, but provides incentives beyond environmental and social safeguards. The results of this study will be useful in designing REDD+ policies and programmes for community forest-based REDD+ stakeholders in developing countries.