Microsoft 365 Nonprofit Licensing Update: What Nonprofits Need to Know

Microsoft has announced a major update to its nonprofit licensing program, impacting free grant offers that thousands of charities and nonprofit organizations rely on. The Microsoft 365 Business Premium grant and Office 365 E1 grant will be retired as Microsoft streamlines its nonprofit offerings. Here’s everything your nonprofit needs to know about the transition to Microsoft 365 Business Basic and discounted Microsoft 365 plans.

Why Microsoft is Retiring Nonprofit Grants

Microsoft’s Tech for Social Impact (TSI) program is designed to help nonprofits access industry-leading tools that enhance organizational productivity and security. To simplify its grant portfolio, Microsoft is retiring the free grant offers for:

  • Microsoft 365 Business Premium

  • Office 365 E1

This change affects organizations currently using these grants, with retirement scheduled on the next renewal date on or after July 1, 2025. Microsoft aims to focus on offers that provide maximum value to nonprofits while maintaining security and productivity.

New Nonprofit Licensing Options

To support nonprofits during this change, Microsoft now provides:

  • Up to 300 free licenses of Microsoft 365 Business Basic
    Includes business email, Microsoft Teams, OneDrive, SharePoint, and web versions of Word, Excel, and PowerPoint.

  • Discounts of up to 75% on Microsoft 365 Business Premium and other Microsoft 365 licenses
    For nonprofits that require advanced features such as desktop Office apps, device management, and enhanced security.

This ensures smaller nonprofits still receive essential productivity tools, while larger organizations can access enterprise-level capabilities at a fraction of the standard cost.

Impact on Nonprofits

Nonprofits relying on Microsoft 365 grants should take note of these changes:

  1. Business Basic becomes the main free plan – Organizations that only need email, Teams, and basic Office apps can continue at no cost (up to 300 seats).

  2. Advanced features may require paid licenses – Desktop apps, device management via Intune, and other premium features now require discounted Microsoft 365 Business Premium licenses.

  3. Plan ahead for transition – To avoid service interruptions, organizations should switch to Business Basic or another discounted plan before the next renewal date.

Frequently Asked Questions

What changed with Microsoft 365 nonprofit licensing?

Microsoft has been retiring some of its free nonprofit grant licences and moving eligible organisations toward discounted paid plans, so charities relying on the free tier need to review their licensing.

Are nonprofits still eligible for discounted Microsoft 365?

Yes. Qualifying nonprofits still receive significant discounts on paid Microsoft 365 Business and Enterprise plans, even where the fully free grant has been reduced.

What should nonprofits do now?

Review which licences your staff actually use, confirm your eligibility status with Microsoft, and plan a move to the appropriate discounted paid plan before any free licences expire.

Can Gander Web help nonprofits with the change?

We do: our UK team helps charities assess their current licensing, choose the right discounted plan and migrate smoothly without losing email or files.

Which paid plans typically replace the grant?

Most nonprofits move to discounted Business Basic, Business Standard or Business Premium depending on whether they need desktop Office apps and advanced security.