Microsoft 365 Grant Changes for Nonprofits: What You Need to Know

This article was last reviewed and updated for accuracy in May 2025.

Microsoft is making important changes to its nonprofit grant programmes, impacting organisations currently using free licences of Microsoft 365 Business Premium and Office 365 E1. If your nonprofit relies on these tools, it’s vital to understand what’s changing, when, and what your options are. This guide answers the key questions nonprofits are searching for online—so you can plan ahead and stay productive.

Why Is Microsoft Ending Free Microsoft 365 Business Premium and Office 365 E1 for Nonprofits?

Microsoft is simplifying its nonprofit grant offerings to streamline the portfolio and focus on core services that support productivity and security at scale. As a result, the free Microsoft 365 Business Premium and Office 365 E1 grants will be retired.

In their place, Microsoft will provide:

• Up to 300 free licences of Microsoft 365 Business Basic
• Discounts of up to 75% on other Microsoft 365 plans, including paid versions of Business Premium and Office 365 E1

These changes apply only to free grant licences—paid subscriptions will not be affected.

When Will Microsoft Stop Offering Free Microsoft 365 Business Premium and Office 365 E1?

The free grants for both Microsoft 365 Business Premium and Office 365 E1 will be discontinued after 1 July 2025, taking effect at your organisation’s next renewal date following that deadline.

💡Example: If your nonprofit’s renewal date is October 2025, you may continue using the grant until that time.

What Are the Alternatives After the Grant Ends?

Once your current grant expires, your organisation will need to transition to one of the following options:

• Microsoft 365 Business Basic
  • Free for up to 300 users
  • Includes web/mobile versions of Office apps, business email, OneDrive, Teams, and SharePoint
• Microsoft 365 Business Premium
  • Available at a nonprofit rate of (to be confirmed) £4.20
  • Includes full desktop apps, advanced security features, and device management tools
• Office 365 E1 via Enterprise Agreement
  • Eligible nonprofits can obtain up to 2,000 free E1 licences by entering into an Enterprise Agreement with Microsoft
• Other Microsoft 365 nonprofit plans
  • Discounts of up to 75% on various cloud solutions tailored for nonprofits

What Happens to My Nonprofit’s Data When the Free Licences Expire?

Microsoft has a standard data retention policy for expired subscriptions. Here’s what to expect:

• 30-day grace period: You’ll retain full access to your Microsoft 365 environment
• 60-day retention window: After the grace period, you’ll have 60 more days to renew or transition your licences
• Data deletion: If no action is taken, your organisation’s data may be permanently deleted after this period

💡To avoid service disruption or data loss, make sure your organisation plans its transition in advance and backs up any critical information.

What Should Nonprofits Do Now to Prepare?

To ensure a smooth transition, here’s a step-by-step action plan:

1. Check your licence renewal date – The change affects renewals after 1 July 2025.
2. Assess your organisation’s needs – Decide whether Business Basic or Business Premium is the right fit.
3. Plan for data backup – Prevent accidental data loss during the switch.
4. Budget accordingly – If upgrading to Business Premium or purchasing additional licences, plan for the discounted costs.

If you’re worried about your licencing and require assistance, please contact hello@cobweb.com