Microsoft Is Ending Free Licensing for Nonprofits – Here’s What You Need to Know Before July 1, 2025

If your nonprofit relies on Microsoft 365 Business Premium or Office 365 E1 through Microsoft’s grant program, there’s a critical change you need to be aware of.

Microsoft is retiring both of these free licensing grants starting July 1, 2025.

Here’s a clear breakdown of what’s changing, what to expect, and how to prepare.

What’s Happening?

Effective July 1, 2025, Microsoft will discontinue its Microsoft 365 Business Premium and Office 365 E1 free grants for nonprofit organizations. If your organization currently uses these licenses for free, they will no longer renew at no cost after your next renewal date.

Let’s put it plainly: if you do nothing, you could face service interruptions, loss of security tools, or unexpected costs.

Watch Now: The End of Free Microsoft Licensing for Nonprofits

What’s Changing?

• Discontinued Grants: Microsoft 365 Business Premium and Office 365 E1 licenses will no longer be free after renewal dates post-July 1, 2025.

• Alternative Licensing:

  • Microsoft 365 Business Basic: Still free (up to 300 users).

  • Microsoft 365 Business Premium: Discounted at ~$5.50/user/month.

  • Office 365 E1: Discounted at ~$2.50/user/month. 

How Do These Plans Compare?

Why This Matters for Nonprofits

For many organizations, this change isn’t just about cost, it’s about functionality and security. Losing access to Microsoft Defender, Intune, or even the desktop versions of Office can create real operational challenges.

If your IT partner hasn’t already briefed you on this, that’s a red flag. You should be preparing now to:

• Avoid licensing surprises

• Maintain security compliance

• Protect access to critical productivity tools

• Budget for new subscription costs, if needed

What You Should Do Next

1.  Review your current Microsoft licenses
Are you using Business Premium or Office 365 E1 through the grant program?

2. Know your renewal date
Your license will expire at the next renewal after July 1, 2025.

3. Evaluate your users’ needs
Do you need desktop Office apps? Advanced security? Copilot AI?

4. Create a transition plan
We recommend starting this conversation well before your renewal.

How Teknologize Can Help

At Teknologize, we specialize in working with nonprofits across Washington and Oregon. We’ll help you:

• Assess your current environment

• Choose the best-fit licensing option for your team

• Ensure security and compliance continuity

• Create a predictable IT budget around Microsoft’s changes

Still unsure what this means for your organization?
Let’s talk. We’ll walk you through your current licensing setup and help you chart the best course forward. 509.396.6640

About Teknologize

Teknologize is a SOC 2 Type II accredited Managed IT and Cybersecurity provider serving small to mid-sized businesses across Washington and Oregon. We deliver full-service Managed IT Support, Co-Managed IT Support, advanced Cybersecurity Solutions, and IT Compliance Services for regulated industries, including Healthcare, Financial Institutions, the Utilities Sector, Manufacturing, and Professional Services.

👉 Book a Discovery Call to see how Teknologize can support your business.

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