Microsoft Ends Free Business Premium Licenses for Nonprofits

Many nonprofits were caught off guard when Microsoft announced on May 14, 2025, that it will discontinue its grant for 10 free Microsoft 365 Business Premium licenses, effective July 1 or at renewal. For organizations depending on this grant, the sudden shift raises financial and operational concerns—but careful planning can minimize the impact.

The change means nonprofits will need to begin paying $5.50 per user per month (or $66 per year) to retain Business Premium licenses. For those using all 10 formerly free licenses, that adds up to $660 annually. However, this doesn’t have to result in a full-cost burden. Alternatives like Microsoft 365 Business Standard ($3/month or $36/year per user) may provide enough functionality, especially for users who don’t need the advanced features of Business Premium. In some cases, switching could reduce costs to $360 per year for 10 users.

Under the new licensing structure, Microsoft is streamlining nonprofit plans: organizations will still receive up to 300 free Microsoft 365 Business Basic licenses, but these only allow use of apps in a browser—no desktop versions are included. Nonprofits that still need desktop apps must now decide between Business Standard or Premium, depending on required features.

The decision to remain with Microsoft or switch to another platform like Google Workspace or Open Office should not be rushed. While alternatives may appear cheaper, transitioning systems can be costly and complex. Additionally, Google’s nonprofit program includes terms some ministries may not agree with, especially regarding employment discrimination clauses.

The key takeaway: Don’t panic. Evaluate each user’s needs and match licenses accordingly. Being strategic, rather than reactive, can help minimize cost increases and ensure your organization remains well-equipped without unnecessary expenses.

For more details, refer to the original article on Church Executive.