Microsoft 365 Nonprofit License Changes: What to Review Before Renewal

Microsoft has updated its nonprofit licensing for Microsoft 365, retiring some of the free grant licenses that many organizations have relied on for years. With additional pricing and suite changes rolling out through 2026, nonprofits face new decisions at each renewal. Planning ahead—ideally 60 days before your renewal date—can help your organization avoid disruption and make the most of available discounts and free options.

Why This Matters to Nonprofits

For years, many nonprofits benefited from free Microsoft 365 Business Premium and Office 365 E1 licenses through Microsoft’s grant program. These options have now been replaced by up to 300 free Microsoft 365 Business Basic licenses per tenant, with discounts available for other plans. On top of this, Microsoft is introducing pricing increases and restructuring the features included in each suite, starting in 2026. If your organization waits until the last minute to review these changes, you risk losing access for some users or paying more than necessary.

Understanding the Changes

The most significant updates for nonprofits are:

• Retirement of free Business Premium and E1 licenses: These are no longer available as grants. Existing users must move to free Business Basic (up to 300 users) or discounted paid plans at renewal.
• Business Basic remains free for up to 300 users: This plan covers core cloud services like email, Teams, and web-based Office apps, but does not include desktop Office applications.
• Discounted paid plans: Nonprofits can still access Business Standard, Business Premium, and enterprise plans at a discount, but these are now based on updated base prices and feature sets.
• Suite restructuring and price changes in 2026: Microsoft is adjusting which features are included in each plan and increasing prices, with at least 30 days notice before your renewal date.

It’s important to note that nonprofit discounts still apply, but the structure and value of those discounts may look different than in previous years. If your organization does not proactively review and reassign licenses before renewal, some users may lose access to certain features or be downgraded to a different plan automatically.

What to Review 60 Days Before Renewal

• License inventory: Review how many licenses are currently assigned and which plans your users have. Identify any users who may no longer need a license.
• Plan features: Compare the features of Business Basic (free) with discounted paid plans. Decide which users need desktop Office apps, advanced security, or other premium features.
• Budget impact: Estimate the cost difference between staying on free Business Basic for some users and upgrading others to paid plans. Factor in the upcoming price changes for renewals after July 2026.
• Eligibility and documentation: Ensure your organization’s nonprofit status is up to date with Microsoft and that you have the documentation needed for discounted pricing.
• Renewal timeline: Set internal reminders to begin this review process at least 60 days before your Microsoft 365 renewal date. This gives you time to consult with your IT provider and make changes without rushing.

How NIS Helps Nonprofits Navigate Licensing Changes

NIS works closely with nonprofit clients to review Microsoft 365 licensing ahead of each renewal. We help you:

• Audit current license usage and identify opportunities to optimize assignments
• Compare free and discounted plan options based on your organization’s needs
• Estimate the budget impact of upcoming pricing and suite changes
• Reassign licenses and update your tenant well before your renewal date to avoid service disruption
• Stay informed about future Microsoft licensing updates relevant to nonprofits

Plan Ahead for a Smooth Renewal

Microsoft’s changes to nonprofit licensing and pricing mean that renewals now require more planning. By starting your review at least 60 days before your renewal date, your organization can make informed choices, avoid last-minute surprises, and ensure your team has the tools they need. If you have questions or want help reviewing your options, NIS is here to support your nonprofit’s technology needs.