For many nonprofit organizations worldwide, Microsoft 365 has been a vital tool. Thanks to Microsoft’s generous donation program, nonprofits can use Microsoft 365 Business Premium and Office 365 E1 plans at no cost. These tools include familiar apps like Word, Excel, Outlook email, Teams for meetings, and OneDrive for file storage — all of which help nonprofits run smoothly without incurring extra costs.
But there’s an important update: Microsoft will stop offering these free Microsoft 365 licenses to nonprofits starting July 1, 2025. This change will impact thousands of nonprofits that have relied on free access to these powerful tools.
What Exactly Is Changing?
Until now, nonprofits could apply and receive free licenses for Microsoft 365 Business Premium or Office 365 E1. These licenses provided full access to Microsoft’s apps and services at no cost — a significant benefit for organizations with limited budgets.
After July 1, 2025, Microsoft will no longer give out these free licenses.
- If your nonprofit currently uses these free licenses, you can keep using them until your license renewal date after July 1, 2025.
- For example, if your renewal date is October 2025, you can continue using your free license until then; however, after that, your free access will expire.
Why Is Microsoft Ending the Free Licenses?
Microsoft hasn’t given many public reasons, but this move is likely to help ensure sustainable support and continued improvements in their products. Free services can be challenging to maintain in the long term, and shifting nonprofits to paid or discounted plans enables Microsoft to invest more in security, updates, and support.
What Are Your Options Moving Forward?
Don’t worry — Microsoft has made alternative options to help nonprofits continue using Microsoft 365:
1. Microsoft 365 Business Basic — Free for Up to 300 Users
- This plan provides access to web and mobile versions of Microsoft Office applications, including Word, Excel, and PowerPoint (although not the complete desktop applications).
- You also get a business email (Outlook), OneDrive cloud storage, Teams for communication, and SharePoint for file sharing.
- It’s entirely free for nonprofits and works great if you mainly use apps online or on phones/tablets.
2. Discounted Paid Plans
- If your organization needs the full desktop Office apps (the programs you install on your computer), you can purchase Microsoft 365 Business Premium or Office 365 E1 licenses.
- Microsoft offers these at up to 75% off the regular price for eligible nonprofits, making it much more affordable than standard business pricing.
3. Enterprise Agreements for Large Organizations
- Nonprofits with more than 300 users can qualify for larger volume licenses (up to 2,000 seats) through Microsoft’s Enterprise Agreements.
- These agreements offer more customization and advanced support options for bigger organizations.
What Should Nonprofits Do Now to Prepare?
This change is expected to arrive in about two years, but the time to act is now. Here’s a simple action plan:
Step 1: Find Out Your Renewal Date
- Check when your current free Microsoft 365 license is set to expire.
- This will inform you of the duration for which you can continue using the free service.
Step 2: Evaluate Your Needs
- Do you need full desktop Office apps, or is web/mobile access enough?
- How many users will need access?
- What features are critical for your organization (email, file storage, collaboration)?
Step 3: Choose Your Next Plan
- If you can work with web/mobile apps, the free Business Basic plan is a great choice.
- If you need full desktop apps or advanced features, consider the discounted paid plans.
Step 4: Backup Your Important Data
- Before any changes or migrations, back up all your emails, files, and documents.
- This protects you against data loss during the transition.
Step 5: Plan Your Transition
- Decide well before your renewal date.
- Coordinate with your IT team or service provider to ensure a smooth setup of the new plan.
Why Taking Action Early Matters
Transitioning your organization’s email, files, and collaboration tools can be a complex process. Planning will reduce the risk of service interruptions and give your team time to get comfortable with any new tools.
Microsoft Partner and nonprofit support partners, such as TechSoup, are providing resources to help with this change. Utilize their guides and support services to make the transition as smooth as possible.
Final Thoughts
While losing the free Microsoft 365 Business Premium and Office 365 E1 grants may feel like a setback, it’s also an opportunity to upgrade and future-proof your nonprofit’s digital tools.
With Microsoft’s discounted plans and free Business Basic tier, nonprofits can continue accessing powerful, reliable productivity tools without breaking the bank.
Stay informed, plan early, and your organization will continue thriving with Microsoft 365.
References and Resources
- TechSoup Blog: Microsoft to Discontinue Select Donated Microsoft 365 and Office 365 Plans
- Nonprofit Quarterly: Microsoft Axes Free 365 Software for Nonprofits
- ABM Now: Microsoft is Ending its Business Premium and E1 Grants for Nonprofits
- Cobweb: Microsoft 365 Grant Changes for Nonprofits
- Microsoft Partner Center: Microsoft 365 Business Premium and Office 365 E1 Grant Discontinuation