Important Update: Microsoft 365 licensing changes for nonprofits in 2025

Microsoft has announced a major change to its nonprofit licensing programme that will affect charities and voluntary organisations worldwide: including here in the UK. From 1st July 2025, Microsoft will retire the free grants for two of its most popular plans: Microsoft 365 Business Premium and Office 365 E1.

This update could have a big impact on how charities access the tools they rely on every day. Including Word and Excel to Outlook, Teams and SharePoint.

Here is a breakdown explaining what is changing, what is being replaced, and how your organisation can prepare now to stay ahead.

What is changing?

If your organisation currently receives donated (free) Microsoft 365 Business Premium or Office 365 E1 licences, those will no longer be renewable after your next licence anniversary following 1st July 2025.

If your charity’s renewal date is October 2025, you’ll continue to receive the donated plan until then, but it won’t be available for renewal after that date.

What will Microsoft offer instead?

Microsoft is not ending its nonprofit support, but it is shifting the offering:

Up to 300 free Microsoft 365 Business Basic licences

• Access to web and mobile versions of Word, Excel, PowerPoint
• Use of Microsoft Teams, SharePoint, OneDrive, and Outlook (online email)
• Does not include desktop Office apps, Microsoft Intune or advanced security tools

Discounted pricing (up to 75% off) for other plans:

• Microsoft 365 Business Premium
• Office 365 E1 and other enterprise-level services

Why this matters to charities

For many charities, this change could bring additional costs: especially if you:

• Depend on desktop-installed Office apps (like Word, Excel or Outlook)
• Use advanced security tools or mobile device management
• Need consistent access for frontline staff or volunteers working offline

Without proper planning, some teams may find themselves under-licensed or unable to access tools they’ve come to rely on.

What happens to my 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

What should your charity do now?

To minimise disruption and stay compliant, we recommend taking a proactive approach:

Step 1: Audit your current licences

• Which plan are you using?
• When is your next renewal date?

Step 2: Assess user needs

• Who needs desktop apps?
• Who could work with Business Basic?

Step 3: Budget for 2025 and beyond

• Prepare for potential licence costs after your next renewal date

Step 4: Get support with the transition

• Whether you need help reviewing licences or applying the right mix of plans, we can help.

We are here to help

Navigating Microsoft licensing can be confusing.. especially when changes like this come in. That is why we’re offering free consultations and licensing reviews for nonprofit organisations.

Let’s make sure your charity keeps access to the right tools, with no surprises.

Frequently asked questions (FAQ)

What’s changing with Microsoft nonprofit licensing?

The free Microsoft 365 Business Premium and Office 365 E1 grants will be discontinued after your next renewal post–1st July 2025.

Is this a global change?

Yes. It applies to all eligible nonprofit organisations worldwide, including UK charities.

What’s replacing the free licences?

• Up to 300 free Microsoft 365 Business Basic licences
• Discounted pricing (up to 75% off) on other Microsoft 365 plans

What’s included in Business Basic?

• Online versions of Word, Excel, PowerPoint
• Teams, SharePoint, OneDrive
• Outlook (online only)
• It does not include the desktop apps or security tools like Intune.

When exactly will our free grant end?

At your next licence renewal after 1st July 2025.

What will discounted licences cost?

Microsoft 365 Business Premium is expected to cost around £4.20/user/month for nonprofits. Be aware that prices are adjusted, but can be bought monthly or annually.

Can we mix and match plans?

Yes. You can assign different plans to different users based on their needs.

Will we experience downtime or disruption?

Not if you plan ahead. Reviewing and updating your licences before renewal will ensure a smooth transition.

Who can help us with the switch?

We can. Our team specialises in helping charities manage Microsoft 365 and navigate licensing changes. Get in touch today.

Contact us now to book your free Microsoft 365 licensing review

We’ll help you understand your options, optimise your licensing, and stay focused on your mission. You can read more about how Adoptive Technologies helps nonprofit organisations here.