Microsoft Retires Key Nonprofit Grants: What You Need to Know Before July 1, 2025

Microsoft has officially announced the retirement of two core nonprofit grant offers, Microsoft 365 Business Premium and Office 365 E1, with the final phaseout taking effect on July 1, 2025. This change impacts nonprofit tenants globally and shifts how partners support their nonprofit clients moving forward.

At 4Sight Dynamics Africa, we’re a Microsoft Direct Distributor with a singular focus: enabling our partners. As someone who works closely with nonprofit stakeholders across the continent through the SureStep program, I want to ensure our partners are prepared to help their customers make this transition with clarity and confidence.

What’s Changing?

Starting July 1, 2025, Microsoft will retire the grant offers for the following nonprofit SKUs:

• Microsoft 365 Business Premium (grant)
• Office 365 E1 (grant)

These licenses will no longer be offered as free grants through either the Direct or Cloud Solution Provider (CSP) channel. Instead, affected tenants will need to move to discounted paid licensing at their next renewal following July 1, 2025.

To clarify:
This does not mean the licenses are revoked on July 1 only that they will not renew as grants beyond that date. If a nonprofit tenant’s renewal is due in October 2025, that’s when the grant ends for them.

Microsoft began notifying nonprofit tenants about this change on May 14, 2025, via direct communication. However, as trusted advisors, we cannot rely solely on Microsoft’s communication. This is a time where proactive partner guidance is essential.

Why Is Microsoft Retiring These Grants?

While Microsoft has not issued a detailed explanation for the retirement, the decision aligns with broader strategic shifts:

1. Consolidation of Licensing Models
   Microsoft is streamlining nonprofit licensing offers to create consistency across channels and improve long-term manageability. The move from grant-based licensing to discounted commercial models supports that effort.
2. Sustainable Cloud Usage
   Paid nonprofit offers come with significant discounts (up to 75%) while still enabling organizations to access the full value of Microsoft cloud solutions. This creates a more sustainable model for both Microsoft and its nonprofit customers.
3. Improved Security and Compliance Oversight
   Business Premium includes advanced security features such as Microsoft Defender and Intune. Paid licensing allows for better enforcement of compliance and licensing terms, which is becoming increasingly important across all sectors.

What This Means for Partners

This shift will significantly impact any Microsoft partner managing nonprofit customers, whether as a CSP Indirect Reseller, advisor, or consultant. The free grant licenses have been widely adopted across the sector, and many nonprofits have based their digital operations around them.

This change is more than administrative it may affect your customers’ budgets, IT planning cycles, and in some cases, their eligibility to continue using Microsoft’s cloud solutions at their current scale.

Partners must now step into a critical advisory role. The organisations you support are going to have questions, and it’s up to us to provide answers that are both accurate and action-oriented.

Your Action Plan as a Partner

Here’s how we recommend approaching this change:

1. Identify Affected Tenants

Run a report across your nonprofit client base to identify those currently using Microsoft 365 Business Premium or Office 365 E1 grants. Document their renewal dates — this will help you time your communication and support appropriately.

2. Prepare Your Internal Teams

Your account managers, billing coordinators, and technical teams should all understand the timeline and impact of this change. They need to be equipped to answer questions, escalate licensing requests, and facilitate transitions to paid options.

3. Communicate Proactively with Customers

Do not wait for your nonprofit clients to receive the Microsoft email and reach out in a panic. Take the lead. Whether through a one-on-one meeting or structured campaign, make sure they know:

• What is changing
• When it will affect them
• What licensing options are available
• How you will support them through the transition

4. Help Customers Budget and Plan

For many organizations, especially those with limited funding or complex donor-based budgets, the transition to a paid license model will require some financial planning. Guide them through nonprofit pricing structures and help them make informed decisions without disrupting operations.

Available Paid Alternatives

The good news is that Microsoft continues to offer generous nonprofit discounts through CSP. These discounts still allow nonprofit tenants to access world-class productivity and security tools at a fraction of the commercial price.

Below are some of the most relevant offers to consider when transitioning customers:

License	Approximate Nonprofit Price (USD)	Key Features
Microsoft 365 Business Premium	~$3.00/user/month	Desktop Office apps, Teams, security tools, Intune, Defender
Microsoft 365 Business Standard	~$2.75/user/month	Office apps, Teams, email, but without security/management tools
Office 365 E1	~$2.00/user/month	Web-based apps, Teams, SharePoint, and Exchange
Microsoft 365 F3	~$2.25/user/month	For frontline staff or occasional users

Note: Pricing may vary slightly by region and reseller. Partners should always confirm nonprofit eligibility through the Microsoft Nonprofit Portal before assigning new licenses.

Planning Ahead: What We’re Advising at 4Sight Dynamics Africa

At 4Sight Dynamics Africa, we’ve already started working with our partners to identify and support affected nonprofit tenants. We’re encouraging all CSP partners to treat this not as a licensing issue, but as a strategic customer conversation.

This is an opportunity to:

• Offer value-added advisory services
• Help customers optimize their licensing footprint
• Introduce complementary security and compliance features they may not have previously used
• Strengthen long-term partner relationships

Our team is available to support you through this transition — with guidance, resources, licensing strategy sessions, and support around the nonprofit validation process.

What’s Next?

The phase-out of nonprofit grants for Microsoft 365 Business Premium and Office 365 E1 is not just a policy change — it’s a signal of where nonprofit licensing is headed. As Microsoft focuses on sustainability, security, and value alignment, partners must adapt to provide both compliance-driven support and real-world value for customers.

Nonprofit organizations across Africa — and around the world — need to understand how these changes affect them. They also need to know that their trusted Microsoft partner is ready with answers.

Let’s make sure that when July 1, 2025 rolls around, no nonprofit is caught off guard.

Reach Out for Support

If you’re unsure which of your customers are impacted, or you’d like support with license planning, validation, or communication templates, our team is here to help.

Contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. to book a one-on-one partner session or request additional guidance.

We’re committed to supporting our partners and the nonprofit sector with the clarity, tools, and collaboration needed to move forward with confidence.