The change, briefly
On July 1, 2025, Microsoft ended two nonprofit grants: the ten free licenses of Microsoft 365 Business Premium, and the Office 365 E1 grant. Organizations holding those licenses lose them at their next renewal date.
What remains is the Microsoft 365 Business Basic grant, free for up to 300 users, plus discounted pricing on the paid tiers. As of September 2026, Microsoft lists Business Premium at $5.50 per user per month paid yearly, Microsoft 365 E3 at $9.75, E5 at $24.00, and F3 at $2.50.
Prices moved again on July 1, 2026, when Microsoft raised nonprofit pricing in step with its commercial increases. Business Standard went from $3.00 to $3.50, E3 from $9.00 to $9.75, E5 from $22.80 to $24.00, and F3 from $2.00 to $2.50.
That is the version of events most coverage reported. It is accurate and it is incomplete.
What actually left the building
Business Basic and Business Premium are not the same product at different prices. Microsoft’s own description of Business Basic is a productivity suite with web and mobile versions of the Microsoft 365 apps, Copilot Chat, essential security features, and 1TB of storage. Business Premium is described as desktop, web, and mobile apps with enterprise-grade security and access management.
“Essential security features” and “enterprise-grade security and access management” are doing a great deal of work in those two sentences.
The practical difference is that Business Premium carried a security stack that Business Basic does not: device management through Intune, endpoint threat protection through Defender for Business, and email threat protection through Defender for Office 365 Plan 1.
A nonprofit that was running ten seats of granted Business Premium and moved those seats to free Business Basic did not simply lose desktop Office apps. It lost:
Centralized device management and enrollment
The ability to enforce device compliance policy
The ability to wipe a lost or stolen device
Endpoint threat detection and response
Advanced email threat protection beyond the baseline
In most of the organizations we would expect to see this in, nobody made a decision to accept that. The licenses lapsed at a renewal date and the capability went with them.
The cost of getting it back, in Microsoft’s own numbers
This is the part that makes the problem tractable rather than vague. Microsoft now publishes the security components as discounted nonprofit add-ons. As listed on Microsoft’s nonprofit offers page in September 2026:
Add-on | Nonprofit price, per user per month |
|---|---|
Microsoft 365 Intune | $4.00 |
Microsoft Defender Suite for Business Premium | $4.00 |
Microsoft Purview Suite for Business Premium | $4.00 |
Defender and Purview Suites combined | $6.00 |
Microsoft Entra Suite | $4.80 |
So the arithmetic for an organization that wants its prior posture back is straightforward.
Forty staff, previously on granted Business Premium.
Business Premium at the nonprofit rate is $5.50 per user per month, or $2,640 a year for forty people. Adding the combined Defender and Purview suites at $6.00 brings it to $11.50 per user per month, or $5,520 a year.
The same forty staff, staying on free Business Basic.
The license costs nothing. Adding Intune for device management costs $4.00 per user per month, or $1,920 a year, and that buys device management alone, without the Defender endpoint and email protection that Business Premium includes in the base SKU.
Those are two very different security positions at two very different prices, and the organization that did nothing is sitting at the third position: no device management, no endpoint protection, and no line item to show for it.
Why this is a procurement failure, not a Microsoft one
Microsoft is entitled to change what it donates. The grant was always a grant.
The failure mode is on the other side, and it is a familiar one: a capability arrived attached to a license, nobody recorded that it was doing security work, and when the license changed the capability left without anyone noticing.
This is the same pattern that produces surprise renewals, orphaned integrations, and audit findings. The organization tracks what it pays for. It does not track what it depends on.
One observation from the market coverage of this change is worth repeating: the nonprofits that were hurt most were the ones that waited until their renewal date to react. That is not a coincidence. A renewal date is when a licensing change becomes a service change, and by then the options are worse and the time to evaluate them is gone.
What to do about it
Establish what you actually lost. Check whether any of your tenant’s licenses were granted Business Premium or Office 365 E1, and what they renewed into. If devices were enrolled in Intune under the old license, they may still appear enrolled while no longer being managed.
Separate the productivity question from the security question. They arrived in one SKU and most organizations still think of them as one decision. They are not. You can run free Business Basic and buy Intune. You can run Business Premium without the add-on suites. The right answer depends on whether your risk is devices, email, data, or identity, and those have different prices.
Price the actual exposure, not the license. A nonprofit holding donor records, beneficiary data, or grant financials on unmanaged laptops has a different problem than one whose staff work entirely in a browser on managed hardware. The license decision should follow from that, not the other way around.
Check the rest of the grant portfolio while you are in there. The Microsoft Ad Grant for Nonprofits ended in December 2025. Microsoft’s current nonprofit offers include an annual Azure grant of $2,000 in credits, Power Apps free for up to ten users, and Windows 11 Professional grants of up to 50 licenses through TechSoup. Grants change. The ones you are relying on should be on a list somewhere with a review date.
Put the renewal dates in a calendar that someone reads. The single cheapest control against this class of problem is knowing when each subscription renews and what happens if it does not.
The wider point
The nonprofit sector is unusually exposed to this pattern because so much of its technology arrives as a donation. Donated technology is genuinely valuable and it comes with a structural risk: the terms are not yours, the roadmap is not yours, and the date it changes is not yours.
That does not argue against taking the grant. It argues for knowing exactly which capabilities you are renting from someone else’s generosity, and what it would cost to replace each one on short notice.
The organizations that handled July 2025 well were not the ones with bigger budgets. They were the ones who knew what the license was doing before it stopped doing it.
