Changes to Microsoft’s Business Premium Grant Announced

Starting July 1, 2025, Microsoft will be retiring its 365 Business Premium and Office 365 E1 grant offers for eligible nonprofits. The discontinuation of this program will affect any organization that is currently enrolled, including changes to the pricing model and features they may be able to access for free. 

Key Information:

 

1. Subscription Changes Take Effect Starting July 1, 2025 Affected organizations have received, or will receive, an email from Microsoft with the date of their next renewal that falls after 7/1/2025. Prior to this date, users will need to transition to a replacement license through the Microsoft 365 admin center. Failure to change licensing selections can lead to disruption of services and data loss.   

2. Free Business Basic Licenses, Discounts for Business Premium & O365 E1 Licenses Still AvailableMicrosoft will continue donating up to 300 Business Basic Licenses and providing discounts of up to 75% for Premium and E1 Licenses for eligible nonprofits. Important Note: Before downgrading to free Business Basic, organizations should understand what key elements, including important security features, are not included in the Basic License package. More information is below.   

3. License Payments are Now Annual CommitmentsNonprofits should be prepared to pay per year, rather than per month. While prices are shown with cost per month, you are required to pay for a full year, with a small cancellation window during the renewal period.   

4. Action Is RequiredNonprofits must log into their 365 Admin Center to make changes. Microsoft will not auto-enroll or auto-downgrade and those organizations that do not proactively make the changes risk data loss and service disruption.
  

How You Can Prepare:

 

1. Understand key differences between Microsoft 365 License Options Free is not always better, or worth it. Below is a full a breakdown of the features users will lose if they consider downgrading from Office 365 E1 Business Premium to Microsoft 365 Business Basic, but a shortlist of key features that may compromise a nonprofit’s security and/or productivity include:

• Advanced Security and Device Management Business Premium includes advanced threat protection, device management, and endpoint security features not available in Business Basic. This is crucial for nonprofits handling sensitive donor or beneficiary data, helping protect against phishing, ransomware, and unauthorized accessFeatures like Microsoft Defender, Intune for device management, and advanced compliance tools help ensure your data and devices remain secure, even with a distributed or remote workforce

• Desktop Version of Office Apps (Word, Excel, PowerPoint Business Premium provides desktop versions of Word, Excel, PowerPoint, Outlook, and more, allowing staff to work offline and access the full functionality of Office apps. Business Basic only offers web and mobile versions, which may be limiting for users who need advanced features or offline access

•  Enhanced Collaboration and Productivity Both plans include Teams, SharePoint, and OneDrive for collaboration, but Business Premium’s desktop apps and additional integrations make real-time collaboration, file sharing, and communication smoother and more robust. This might not be critical for all organizations, but the ones that heavily use these apps would feel tension and strain without access to all features.                  See a full list of features here:🔄 Shared Features Available in Basic & E1

• Web and Mobile Versions of Office Apps (Word, Excel, PowerPoint)
• Email and Calendar with 50 GB Exchange Mailbox
• Teams
• 1 TB OneDrive Storage
• SharePoint Online
• Forms, Lists, and Planner
• Basic Security & Compliance Features*
• Multi-Factor Authentication

❌ Features Lost When Downgrading to Business Basic:

• Desktop versions of Office apps (Word, Excel, PowerPoint)
• Power Platform including Power Apps, Automate, and Virtual Agents for Teams
• Security Features including User Provisioning, Self-Service Password Reset, and On-Premise AD Sync for SSO
• Teams Message Retention, Manual Retention Labels and Transcription
• Exchange Online Archiving (50 GB additional)
• Viva Insights and Productivity Score
• Teams Live Events, Webinars, and Stream
• Delve & Graph API Access
• Visio Online

      2. Audit current licensing spread and assess future licensing needsMicrosoft allows organizations to mix and match licensing across their users. Using the above features list for guidance, nonprofits can make plans for staff needing advanced licensing features versus staff that may get away with Basic License features. Taking into account costs, usage, and security needs, organizations can find a combination that best fit their needs and budget. For example:

• If your organization uses the Power Platform, but not all users need access, avoid losing custom automations and apps by assigning them to a single user account that will remain with an E1 License while other licenses are downgraded to Basics
• If users recorded Teams meetings, the recordings are stored in Stream, which is not included in a Basic License (rather they are saved, and take up storage space in OneDrive or SharePoint). Users recording a high number of Teams meetings can stay on E1 licenses, while remaining users can use Basic license and pick to save only important recorded meetings.

      3. Make plans to transition all granted licenses to a new subscription plan.Nonprofit admins should log into their 365 Admin Center between now and their renewal period. To make these changes, admins can follow steps that Microsoft shares in its update email:1.     Select the Microsoft 365 Business Basic grant or another Microsoft 365 offer for nonprofits through the Microsoft 365 admin center,2.     Confirm the licenses are present in your tenant.3.     Replace the licenses, by selecting all of your users with a Microsoft 365 Business Premium license and choose to replace these users’ licenses with Business Basic or another Microsoft 365 offer for nonprofits, and  4.     Select your Microsoft 365 Business Premium subscription and choose to cancel the subscription.  More guidance about how to manually change Microsoft licenses can be found in this support article: Change Microsoft 365 for business plans manually | Microsoft Learn.    

4. Understand Disruption of Services, Data Loss, and Deletion PossibleMicrosoft licenses enter “expired” status immediately after the current subscription reaches its end date. If nonprofits do not transition their current licenses into a new subscription, admins have 90 days to access files or complete a switch. After said date, Microsoft has the right to delete all data within your tenant. If an organization is considering alternatives, or is planning to move off of their Microsoft tenant, we strongly suggest backing up all data at a scheduled date to ensure continuity. For example, users downgrading to Business Basics will lose access to Stream, where recorded Teams meetings are stored. Prior to downgrading, migrate and/or save these recordings to another location. 

Next Steps:

 Microsoft announcements comes at a time where many nonprofits are feeling the financial squeeze during these uncertain times. Tech Impact Managed Services clients can connect with their Account Managers for support in finding the best licensing combination for their organizations. Organizations not currently in our community of clients can consider booking a 30-minute consultation with one of our Leadership Team Members to discuss security concerns, risk management, and operational efficiencies through technology.