Microsoft’s Nonprofit Grant Cuts Threaten Capital Campaigns: Here’s What To Do

On May 15, 2025, Microsoft announced the cancellation of its Microsoft 365 Business Premium and Office 365 E1 nonprofit grant programs. Nearly 400,000 nonprofits will lose access to free desktop apps, email, storage, and essential security tools. Many will need to pay out of pocket or switch platforms within 45 days of their renewal dates.

For roughly 33,000 nonprofits, this change will happen in July. The timing and scope of this decision have serious implications for any organization running a capital campaign.

Microsoft’s Nonprofit Grant Cuts: What’s Changing

Starting July 1, 2025, Microsoft will discontinue free licenses for:

• Microsoft 365 Business Premium (formerly 10 free desktop app licenses)
• Office 365 E1 (formerly available via standard nonprofit grant channels)

If your license renewal falls after July 1, your grant will no longer be honored. Microsoft has stated that organizations must either switch to discounted paid licenses (approximately $5.50 per user/month) or downgrade to Microsoft 365 Business Basic. The Basic plan offers only web-based Office tools and strips away desktop apps, advanced security, and offline access.

Capital Campaign Disruption

Capital campaigns depend on consistency and coordination. A sudden shift in software affects how teams meet, share documents, track pledges, manage donors, and prepare reports. Here’s where this disruption hits hardest:

• Documents and Tracking: Pledge spreadsheets, donor lists, capital budgets, prospect research, and board presentations often live in Excel, Word, or PowerPoint. Downgrading or migrating these files can create confusion and formatting issues.
• Collaboration: Many campaigns use Microsoft Teams for internal communication. Losing access means rebuilding coordination on another platform mid-campaign.
• Access and Security: The end of Business Premium grants removes access to offline tools. Many organizations operate in low-connectivity areas or need to work on the go. Security tools also disappear, raising concerns for sensitive donor information.
• Cost Shifts: For a 20-person nonprofit, the annual expense to retain current functionality is about $1,320. For groups with budgets under $500,000, that’s a meaningful hit. For some, that cost equals a part-time staff position, a fundraising consultant, or outreach materials for campaign phases.

Nonprofit Tech Budget Stress Is Growing

This change comes during a period of financial constraint for many nonprofits. Federal funding programs have been cut or delayed. Private giving remains uncertain. New software costs — even modest ones — are rarely accounted for in restricted grants or long-term capital budgets.

Microsoft’s decision to withdraw these grants after more than ten years adds stress to an already thin margin. It also risks setting a trend. If the largest tech firm in the world stops supporting the sector this way, others may see it as a green light to follow.

Better Options for Nonprofits

Nonprofits can and should act now. If your campaign relies on Microsoft tools, consider shifting to systems that are free, dependable, and purpose-fit.

Recommended Alternatives:

• Google Workspace for Nonprofits: Includes Gmail, Docs, Sheets, Slides, Calendar, Drive, and Meet. Available at no cost to qualifying nonprofits. These tools support simultaneous collaboration and offer an offline mode.
• Zoom: Paid plans are available with nonprofit discounts. A solid replacement for Teams, especially during donor and board meetings.
• LibreOffice or OnlyOffice: Free downloadable desktop suites compatible with Microsoft file formats. Ideal for organizations that need offline use and want to keep documents on local machines.

Switching early helps prevent disruptions when your Microsoft license expires. Take inventory now of what platforms are used in your campaign and begin testing alternatives.

Make Your Voice Heard

There is still time to press Microsoft for a reversal. These programs have served nonprofits since 2013. Changing the policy with minimal notice sends the wrong signal.

Sign this petition to support efforts urging Microsoft to reinstate the grants.

You can also post about how this change affects your organization. Encourage partners, board members, and vendors to speak up.

Final Thoughts

Microsoft has the ability to support nonprofit infrastructure at a very low cost. Choosing not to do so creates new expenses and logistical challenges for thousands of organizations, many of which are engaged in multi-million-dollar campaigns that depend on reliable collaboration and donor stewardship tools.

Nonprofits should prepare now to limit disruption. Tech vendors and philanthropists should take note. Infrastructure is not a luxury. This shift deserves a response.