Microsoft Ends Free Business Premium and E1 Licenses for Nonprofits: What You Need to Know

As a Microsoft Cloud Solution Provider (CSP) and Partner, Ariel IT Services is committed to keeping our nonprofit clients informed and prepared for changes that impact their technology strategy. One such major change is coming soon: Microsoft is discontinuing its free (grant-based) Microsoft 365 Business Premium and Office 365 E1 licenses for nonprofits, effective July 1, 2025.

What’s Changing?

Starting July 1, 2025, Microsoft will no longer offer the following donated (free) licenses:

• Microsoft 365 Business Premium (Grant)

• Office 365 E1 (Grant)

These licenses have been widely used by nonprofits to access essential productivity and collaboration tools at no cost. However, they will no longer be renewable after this date. If your organization currently uses one of these plans, you’ll need to transition to a different license type at your next renewal.

What Licenses Are Still Free?

The good news is that Microsoft 365 Business Basic will continue to be available as a free grant-based license for eligible nonprofits. This plan includes:

• Web and mobile versions of Word, Excel, PowerPoint, and Outlook

• Microsoft Teams, SharePoint, and Bookings

• 1 TB of OneDrive storage per user

• Business-class email hosting

Note: Business Basic does not include desktop Office apps.

Paid Options and Pricing

For nonprofits needing more advanced features, Microsoft offers deeply discounted paid licenses, typically around 75% off commercial pricing. These include:

• Microsoft 365 Business Premium (Discounted)

• Full desktop Office apps

• Advanced security and compliance tools

• Access to Microsoft 365 Copilot and other AI-powered features

• Estimated nonprofit price: \$5.50–\$6.00/user/month

• Office 365 E1 (via Enterprise Agreement)

• Available for larger nonprofits (300+ users)

• Up to 2,000 seats may be granted under an EA

• Estimated nonprofit price: \$2.25–\$3.00/user/month

Why Is Microsoft Making This Change?

According to Microsoft’s Tech for Social Impact team, this shift is part of a broader effort to:

• Simplify licensing by reducing overlap between similar plans (e.g., Business Basic vs. E1)

• Encourage adoption of modern, secure, AI-ready tools

• Improve long-term security and compliance for nonprofit organizations

By focusing on fewer, more robust offerings, Microsoft aims to make it easier for nonprofits to choose the right tools for their mission.

What Should You Do Now?

If your nonprofit is currently using a grant-based Business Premium or E1 license, here’s how to prepare:

1. Check your renewal date – The change applies at your next renewal after July 1, 2025.

2. Review your current licenses – Identify which users are on affected plans.

3. Evaluate your needs – Consider whether Business Basic meets your needs or if a discounted paid plan is more appropriate.

4. Plan your transition – Ariel IT Services can help you migrate smoothly and avoid data loss.

Important: If you don’t switch before your license is canceled, you’ll lose access to your data after 90 days.

 Need Help Navigating the Change?

At Ariel IT Services, we’re here to support you every step of the way. Whether you need help evaluating your options, migrating to a new plan, or maximizing your Microsoft investment, our team is ready to assist.

Contact us today to schedule a free consultation and ensure your nonprofit is ready for the July 2025 transition.