Microsoft has announced a change to its nonprofit offerings in July 2025. Previously, nonprofits could qualify for 10 free Microsoft 365 Business Premium licenses and unlimited free Office 365 E1 licenses. These grant offers will be retired starting July 1, 2025. Active subscriptions will continue until the subscription’s anniversary (the expiration/renewal) date, sometime after July 1, after which the subscription will end. 

If you have questions or need help navigating these changes, don’t hesitate to reach out to your IT partner, your internal IT staff, or contact Community IT for guidance. Microsoft continues to clarify these changes, so please check with your account and your IT staff for the latest updates.

Microsoft 365 Business Premium Licenses 

Community IT is advising clients to note the expiration date of their 10 free Microsoft 365 Business Premium licenses. Microsoft initially announced that the 10 free Microsoft 365 Business Premium licenses would be cancelled at their expiration date, prompting concerns that nonprofits would suddenly lose Microsoft services on that date. Microsoft has since clarified that they intend to convert the free licenses to discounted licenses on the expiration date, meaning that nonprofits should not risk severe interruption.

We advise nonprofits to know your expiration date and understand the impact of this changeover to your budget. We also expect Microsoft to make license holders aware of the change, but nonprofits with expiration dates in July and August 2025 should be planning now to prepare.

To find the expiration date on your free Microsoft 365 Business Premium licenses, check your account. 

Office 365 E1 Licenses 

If your nonprofit is using free Office 365 E1 licenses, our understanding is that these will also be converted to a discounted version at the subscription’s anniversary. Because discounted Office 365 E1 licenses are not free, we recommend that nonprofit organizations with less than 300 users replace them before expiration with the equivalent free Microsoft 365 Business Basic licenses. At any point before the expiration of existing Office 365 E1 licenses, organizations should procure Microsoft 365 Business Basic subscriptions and assign them to users who are currently assigned Office 365 E1 licensing.

The Office 365 E1 licenses should then be unassigned from all users so that all of the organization’s Office 365 E1 licenses are unused, and the E1 subscription should also be cancelled.

Qualified nonprofits can get up to 300 Microsoft 365 Business Basic licenses for free. New free Microsoft 365 Business Basic licenses should be in place before the expiration date to avoid service interruption, or the automatic conversion to discounted E1 licenses (unless you just really want to pay .. )

To learn the expiration date of your E1 licenses, check your account.

The Office 365 E1 to Microsoft 365 Business Basic change should be unobtrusive to end users since the two licenses are very similar in functionality. The main difference between the two is that an organization can obtain up to 300 free Microsoft 365 Business Basic licenses, whereas previously Office 365 E1 quantities were unlimited. Nonprofits who need more than 300 Microsoft 365 Business Basic licenses will need to budget accordingly.

There is a discounted Office 365 E1 subscription available, depending on the pricing structure your nonprofit qualifies for. As far as possible, we suggest nonprofits make use of the free Business Basic license for as many staff as you can before paying for discounted E1 licenses.

Other Changes to Microsoft Free Nonprofit Licenses

This July 2025 change only affects organizations using the free grant licenses. Previously discounted licenses, including Office 365 E3, remain unaffected. 

Microsoft is still offering qualified nonprofits up to 300 free licenses of Microsoft 365 Business Basic and a 75% discount on Microsoft 365 Business Premium licenses. 

Large clients with an Enterprise Agreement may still qualify for free E1 licenses; check your contract and talk with Microsoft. 

Microsoft does still offer substantial discounts and support for nonprofits. With proactive planning, your organization can maintain a secure and productive IT environment using the Microsoft 365 platform. But the loss of these grants is disappointing. Microsoft’s generosity to the nonprofit community continues to evolve as documented in our articles from 2019 and 2021) 

Ready for IT support you can depend on?

We’ve found that many nonprofit organizations deal with more IT issues than they should have to. Resources are tight. Systems are unreliable, responses are too slow, and repairs are too expensive. Sometimes nonprofits don’t even realize how bad things are until something big breaks and their mission is derailed.

Our process is based on decades of exclusively serving nonprofits. Our technicians have certifications across all major platforms, and we constantly research and evaluate new solutions to ensure that you get cutting-edge solutions that are tailored to the needs of your organization.

We regularly present webinars at Community IT about IT issues and best practices, and we work hard to keep our nonprofit technology community informed and engaged in managing IT as a strategic asset.

If you have more questions about these changes to Microsoft free nonprofit licenses or other aspects nonprofit IT management, just ask.

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