Microsoft will discontinue its Microsoft 365 Business Premium and Office 365 E1 grants for non-profit organizations, a significant policy change effective upon their next license renewal on or after July 1, 2025. This development requires many non-profits, particularly smaller entities that previously utilized up to ten free Business Premium licenses, to re-evaluate software budgets and transition to new licensing models to maintain essential services like email and cloud storage.
Explaining the decision, Microsoft stated, “Microsoft regularly assesses the available grant portfolio, and the Microsoft 365 Business Premium and Office 365 E1 grant offers are being retired to streamline our grant offerings and simplify our grant portfolio.” The company will continue providing up to 300 granted Microsoft 365 Business Basic licenses. Discounts of up to 75 percent on other Microsoft 365 offers, including Business Premium, will also remain, according to a Microsoft notification. However, moving from fully granted premium licenses will introduce new operational costs for numerous organizations.
Microsoft strongly advises affected non-profits to migrate users to a different Microsoft 365 offer before their current subscription cancels. This proactive step is crucial to prevent service interruption or potential data loss. The change impacts non-profits with licenses obtained through Cloud Solution Provider (CSP) partners (companies that resell Microsoft cloud services) or direct online purchases. Organizations with Enterprise Agreements are not affected.
Non-Profit Sector Reacts to Changes
The discontinuation, particularly of the ten free Microsoft 365 Business Premium licenses, has sparked considerable concern within the non-profit community. One Reddit user estimated this could mean an additional financial burden of approximately “~$600 per year from small non-profits.”
Highlighting the impact on smaller organizations, another user commented in a separate Reddit discussion that the change primarily affects “the little guys who are trying to get off the ground with pathetic funding that gets cut every year.” This view was echoed by another user who noted that the change“hits public libraries and museums as well. And those do good work on very minimal budgets.”
In response to these developments, The International Misophonia Foundation, a small non-profit, initiated a Change.org petition. The petition, highlighted in a Microsoft Community Hub post, urges Microsoft to reconsider, arguing the change means organizations will face “hundreds of dollars they don’t have a budget for or lose important desktop apps and advanced security protection,” potentially affecting over 400,000 non-profits globally.
Understanding the Licensing Alternatives
Microsoft explained in a statement shared by Phoenix Software, their objective is “to ensure every nonprofit can benefit from the industry leading solutions that are critical to ensuring the highest level of organisational security and productivity.” They emphasized that the adjustment only impacts free grant offers and does not affect currently paid licenses. Furthermore, Microsoft clarified, “There is no change to the Azure grant, Office 365 E1 grant via Enterprise Agreement, or any of the pricing on our nonprofit offers at this time.”
Non-profits can transition to the Microsoft 365 Business Basic grant, which provides up to 300 free licenses. For organizations requiring more advanced features, discounted seats for many Microsoft 365 non-profit offers, including Business Premium, remain available at up to 75% off, as outlined by Microsoft and reported by Phoenix Software. However, downgrading from Business Premium to Business Basic involves losing access to desktop versions of Office applications and several security features.
Navigating the Transition and Seeking Support
Organizations must manually update their licensing within the Microsoft 365 admin center. This process involves selecting a new grant or offer, confirming the new licenses are active in their tenant, and then replacing the legacy licenses for their users. Microsoft advises that if a subscription ends without action, users will have a 30-day grace period for access. Afterward, access to the licenses is lost, with data deletion following 60 days later, adhering to standard Microsoft retention policies, according to Phoenix Software.
Some members of the IT support community for non-profits are actively responding to these changes. Good Heart Technology, in a blog post, stated they are “actively engaging with Microsoft, the broader IT provider community, and the Microsoft Social Impact team to seek clarity on this policy change and explore potential alternatives.”
The organization also issued a broader call to action: “We also call upon other software vendors, particularly those specializing in endpoint protection and cybersecurity, to step up and offer pro bono services to support nonprofits during this critical time.” Non-profits seeking guidance can explore resources from Microsoft partners, such as Phoenix Software.
