Urgent Update: Navigating the Microsoft Grant Changes for Your Nonprofit
As a small or startup nonprofit leader, you've likely relied on Microsoft's generous grant programs for essential software. These programs have been a lifeline, providing crucial tools like Microsoft 365 Business Premium and Office 365 E1 at little to no cost. However, a significant shift is underway, and it's imperative that you understand what's happening and how to prepare.
Microsoft has announced that it will be discontinuing the free grants for Microsoft 365 Business Premium and Office 365 E1, effective July 1, 2025. This change comes with a short notice period and will impact approximately 400,000 nonprofits worldwide.
For many small organizations, this isn't just a minor adjustment; it's a potential financial blow that could force difficult decisions between technology and direct services.
What Exactly Is Changing?
Previously, eligible nonprofits could receive:
Microsoft 365 Business Premium: This included 10 free seats, offering full desktop versions of Office apps (Word, Excel, PowerPoint, Outlook), advanced security features, and device management tools.
Office 365 E1: This provided free access to web-based Office apps, email, and collaboration tools, often through standard nonprofit channels or Enterprise Agreements.
As of July 1, 2025, these free grants will no longer be available upon your organization's next renewal date.
What Microsoft will continue to offer:
Up to 300 free Microsoft 365 Business Basic licenses: This includes web and mobile versions of Office apps, Teams, email, SharePoint, and 1TB of OneDrive storage.
Discounted pricing (up to 75% off) on other Microsoft 365 plans: This includes Business Premium and E1, meaning you'll now pay a discounted rate for these previously free services (e.g., around $5.50 per user per month for Business Premium).
Up to 2,000 free Office 365 E1 licenses via Enterprise Agreement: This is generally for larger nonprofits with more than 300 employees and a minimum paid seat purchase.
Why This Matters
This change disproportionately affects smaller organizations for several reasons:
Loss of Functionality: For many, the free Business Premium grant provided access to robust desktop versions of Office applications, which are crucial for tasks like complex grant writing, detailed financial reporting, and data analysis. The free Business Basic plan offers only web-based versions, which may lack the full functionality and offline access needed by your organization.
Reduced Security Features: Business Basic lacks the advanced security features (like Microsoft Defender and device management) that Business Premium offered. For nonprofits handling sensitive donor or beneficiary data, this could expose them to increased cybersecurity risks.
Short Notice: The two-month transition window provides very little time for organizations to evaluate alternatives, retrain staff, or adjust budgets that are typically planned months or even years in advance.
How You Should Prepare: A Step-by-Step Guide
The good news is that you have options, and proactive planning starting today can help minimize disruption.
Assess Your Current Microsoft Usage and Renewal Date:
Identify your current licenses: Log into your Microsoft 365 Admin Center to see which licenses your organization is using (specifically Microsoft 365 Business Premium Donation and Office 365 E1 Donation).
Check your renewal date: This is crucial. If your renewal date is before July 1, 2025, your current free licenses will renew for another year. If your renewal is on or after July 1, 2025, you will need to transition before that date to avoid service disruption.
Understand your actual needs: Do all your staff truly need the full desktop versions of Office apps? Or would web-based versions suffice for some? Do you handle highly sensitive data that necessitates advanced security?
Explore Your Microsoft Options (and Their Costs):
Microsoft 365 Business Basic (Free for up to 300 users):
Pros: Free, includes web/mobile Office apps, Teams, email, SharePoint, 1TB OneDrive.
Cons: No desktop applications, limited security features.
Best for: Organizations with very basic IT needs, limited budget, and staff who primarily work online.
Microsoft 365 Business Premium (Discounted Nonprofit Rate - approx. $5.50/user/month):
Pros: Full desktop versions of Office apps, advanced security (Microsoft Defender, Intune for device management), enhanced collaboration.
Cons: Now incurs a monthly cost per user.
Best for: Organizations that rely heavily on desktop applications, handle sensitive data, and need robust security and device management. Consider this a strong option if your budget allows.
Office 365 E1 via Enterprise Agreement (up to 2,000 free licenses):
Pros: Free for eligible organizations, suitable for larger teams.
Cons: Requires an Enterprise Agreement with Microsoft, typically for organizations with 250+ paid seats. Unlikely to be a fit for small startups.
Consider Alternative Platforms:
Don't feel locked into Microsoft if the new pricing or feature set doesn't align with your needs. Many excellent alternatives offer free or heavily discounted options for nonprofits:
Google Workspace for Nonprofits (Free): This is a strong contender. It offers free access to Google Docs, Sheets, Slides, Gmail, Google Drive, and Google Meet. It's cloud-based and collaborative, with good offline editing capabilities.
LibreOffice (Free and Open-Source): A powerful, free, and open-source office suite that is highly compatible with Microsoft Office file formats. This is a great option for organizations that need desktop applications without the recurring cost.
Other cloud-based productivity suites: Explore tools like Zoho for Good, which offers discounted email and office tools.
CRM and Donor Management Specifics: For donor management, consider platforms like DonorDock, which offers a "Spreadsheet Freedom Fund" grant for a free one-year subscription to their Lite plan for eligible nonprofits.
Graphic Design: Canva for Nonprofits provides free or discounted access to their premium design tools.
Develop a Transition Plan:
Budgeting: Factor in the new costs for Microsoft licenses or for migrating to alternative solutions. Even discounted rates can add up.
Data Migration: If you decide to switch platforms, plan for data migration (emails, documents, files). Microsoft typically offers a 30-day grace period post-renewal before deactivating licenses, and an additional 60 days before data deletion. Act well before your renewal date to avoid data loss.
Staff Training: If you transition to a new platform (e.g., Google Workspace), allocate time and resources for staff training to ensure a smooth adoption.
While the Microsoft grant cancellations present a new challenge, they also offer an opportunity to re-evaluate your technology, optimize your resources, and potentially discover more cost-effective and mission-aligned solutions. By taking proactive steps and planning strategically, your small or startup nonprofit can continue to thrive and deliver on its vital mission.