A big change is coming to Microsoft nonprofit pricing: The company announced that, starting July 1, 2025, it will no longer offer full grants to two of its broadest and most popular license suites: Office 365 E1 and Microsoft 365 Business Premium.
While changes like these are difficult to manage, especially for nonprofits juggling limited budgets and tight timelines, it is critical to understand what’s changing and take proactive action prior to your next renewal on or after July 1, 2025.
What’s Changing in Microsoft Nonprofit Pricing? And What are Your Options?
Upon your next renewal after July 1, 2025:
- If you’re using the donated/grant versions of either Microsoft 365 Business Premium and/or Office 365 E1, and would like to continue using these licenses, you will have to start paying 75% of regular pricing to keep the licenses and service.
- If you decide to pay the discounted pricing to maintain the same level of functionality for your users, you will have to subscribe for an annual term, pay for the licensing upfront and then annually upon your renewal date.
- Another option Microsoft is offering is to downgrade all, or some, of your users with these subscriptions to Microsoft 365 Business Basic. Microsoft will continue to donate this subscription (up to 300 seats) to eligible nonprofits. You will need to pay the discounted pricing for the seats kept on Microsoft 365 Business Premium or Office 365 E1.
- This link provides a comparison of the features of all the Microsoft 365 offerings, including Premium options and Microsoft 365 Business Basic.
You will need to make licensing changes proactively before your next renewal, which occurs on or after July 1, 2025.
What Should You Do Next?
Here’s a step-by-step roadmap to help your nonprofit stay ahead of the change. The timing for this will vary depending on how long after July 1, 2025, your renewal is:
| Timeframe | Action Item |
| Now (or 4 weeks prior to your next renewal) | Confirm which licenses your nonprofit is currently using. Pay close attention to the SKU names, since there are SKUs, such as Microsoft 365 Business Premium (Nonprofit Staff Pricing), which you would have been paying for already, and Microsoft 365 Business Premium Donation (Nonprofit Pricing), which you would not have been paying for. The latter is the impacted SKU/product. |
| Next 2 weeks | Contact your provider or Microsoft partner to assess impact. |
| By two weeks prior to your next renewal | Choose new licenses, apply discounts and plan your transition. |
| Before your renewal date (post July 1, 2025) | Finalize setup to avoid service disruptions. |
How Withum Can Help
With extensive experience in helping nonprofits navigate through Microsoft licensing transitions. As a Microsoft partner with deep nonprofit experience, we can help you:
- Audit your current usage to avoid over-licensing.
- Identify the most cost-effective Microsoft nonprofit licensing path for your needs.
- Apply available grants and discounts.
- Plan a smooth, non-disruptive migration.
Even if you’re not ready to make a change today, starting the conversation now ensures you don’t get caught off guard with Microsoft nonprofit licensing changes.
Final Thoughts
We understand this change to Microsoft nonprofit pricing may bring challenges, but it’s also an opportunity to rethink and streamline your digital setup. You don’t have to figure it out alone, and you don’t have to overpay. Let’s find the right solution for your business together and make sure your technology continues to support your mission, not hinder it.
Contact Us
Contact Withum’s Digital Workplace Solutions Team to get a customized Microsoft licensing transition plan. We’ll help protect your budget while maintaining the tools your mission depends on.
