Microsoft 365 licensing for nonprofits is changing, and many charities will need to make decisions before their next renewal.
Microsoft has discontinued the free grant versions of Microsoft 365 Business Premium and Office 365 E1 for nonprofit organisations. Existing grant licences will expire at the organisation’s next renewal date and will not renew under the same free grant model.
Microsoft continues to offer up to 300 granted Microsoft 365 Business Basic licences for eligible nonprofits, alongside discounted pricing on many Microsoft 365 nonprofit offers.
You can read Microsoft’s official nonprofit update here: Microsoft nonprofit licensing updates
There is also a wider Microsoft 365 pricing and packaging update taking effect from 1 July 2026. Microsoft has confirmed that existing customers remain on current pricing until renewal, which makes your organisation’s renewal date the key planning point.
You can read Microsoft’s official pricing update here: Microsoft 365 pricing and packaging updates
For charities, the immediate concern may be cost. But this should not be treated as a simple licence replacement exercise. A Microsoft 365 licence change can affect desktop apps, email, Teams, SharePoint, device management, identity controls, phishing protection and how sensitive data is protected.
The right question is not:
“What is the cheapest replacement licence?”
The better question is:
“Which users need which tools, and what level of protection does each role require?”
Do not renew by previous licence name
A common mistake is to start with the old licence and look for the closest replacement.
That can lead to poor decisions.
Some users may have had Business Premium only because it was previously available as a grant. They may not need every feature included in that plan.
Other users may genuinely need Business Premium because they handle confidential data, work remotely, access finance systems, use managed devices or have elevated permissions.
For many charities, the right answer is not one licence for everyone. It is a planned mix of Microsoft 365 Business Basic, Business Standard and Business Premium, based on role, access and risk.
Renew by user risk, not by previous licence name.
Where Business Basic fits
Microsoft 365 Business Basic can be useful for eligible charities where users only need lightweight access.
It may suit users who:
- Only need web and mobile Office apps
- Use Outlook, Teams, SharePoint and OneDrive lightly
- Do not need desktop Word, Excel, PowerPoint or Outlook
- Have limited or temporary access requirements
- Do not handle sensitive organisational data
- Do not need managed device controls through their licence
Business Basic can work well for some light users, occasional users, volunteers or limited-access roles.
However, it should not become the default replacement for every affected user. It may be free for eligible nonprofits, but free is only valuable if the licence still fits the user’s role and risk level.
Where Business Standard fits
Microsoft 365 Business Standard is relevant where users need the full desktop Office apps but do not necessarily need the advanced security and device management features included in Business Premium.
It may suit users who:
- Need desktop Word, Excel, PowerPoint and Outlook
- Work heavily with documents or spreadsheets
- Need offline access to Office files
- Have a lower security-risk profile
- Use a controlled device environment
Business Standard should not be chosen simply because it is cheaper than Business Premium. It should be used where the organisation has checked that the user does not need the additional protection included in Premium.
For charities, this distinction matters. A user may look like a standard office worker, but if they handle donor data, payroll information, safeguarding records, finance approvals or leadership documents, their risk profile may justify stronger protection.
Where Business Premium fits
Microsoft 365 Business Premium is usually the strongest fit for users who need productivity tools and stronger security.
Microsoft’s nonprofit plan comparison shows Business Premium as the plan that adds advanced cyberthreat protection and device management capabilities compared with lower business plans.
You can compare Microsoft’s nonprofit plans here: Microsoft 365 nonprofit plans and pricing
Business Premium should usually be prioritised for users who:
- Handle finance, payroll or payment approvals
- Access donor, HR, safeguarding or service-user information
- Work remotely or across multiple locations
- Use laptops or mobiles to access charity data
- Need stronger protection from phishing, malware and ransomware
- Require Microsoft Intune device management
- Need stronger identity and access controls
- Have access to sensitive SharePoint sites or Teams
- Have admin privileges or elevated permissions
Business Premium does not need to be assigned to every user by default. But removing it from high-risk users should only happen after a proper review.
The hidden risk of downgrading
Downgrading from Business Premium to Business Basic or Business Standard is not just a billing change. In some Microsoft 365 environments, it can change the security model.
Before downgrading users, charities should check whether they rely on:
- Microsoft Intune device management
- Microsoft Defender for Business
- Conditional Access policies
- Mobile application protection policies
- Endpoint security baselines
- Device compliance policies
- Controlled access from personal devices
- Admin account protection
- Security reporting and management controls
Some information protection, compliance and Microsoft Purview features may also depend on specific plans or additional licensing, so these should be checked before changes are made.
If these controls are already in use, changing licences without a review can create gaps. For example, a charity may have devices enrolled in Intune, Defender protecting laptops, or Conditional Access rules controlling who can sign in and from where. If licence changes affect those controls, the organisation needs to understand the impact before renewing.
Charity user groups need different licence decisions
The table below gives a practical starting point.
User group | What to check | Likely licence direction |
Finance and payroll | Payment approvals, payroll data, supplier invoices, phishing risk | Usually Business Premium |
Fundraising | Donor data, campaign files, CRM exports | Usually Business Premium |
HR and safeguarding | Confidential records and restricted documents | Usually Business Premium |
Senior leadership | Strategic documents, approvals, high-value inboxes | Usually Business Premium |
Trustees | Board papers, finance reports, governance files | Premium or tightly controlled access |
Volunteers | Limited Teams, SharePoint or file access | Business Basic or guest access |
Temporary staff | Short-term access and clear leaver date | Basic, Standard or Premium depending on role |
Light users | Email, Teams and web apps only | Business Basic where risk is low |
Desktop Office users | Full Office apps and offline working | Standard or Premium depending on risk |
Admin users | Tenant settings, security and billing control | Separate privileged access review |
The important point is that licence decisions should follow the user’s role, access level, device use and data risk.
Trustees, volunteers and admin accounts need extra attention
Charities should not treat trustees, volunteers and admin users as standard staff accounts.
Trustees may need access to board papers, budgets and governance documents. Volunteers may only need access to one Team or SharePoint folder. Admin users may have control over the whole Microsoft 365 environment.
Before renewal, charities should review:
- Which trustees and volunteers still have active accounts
- Whether access is still required
- Whether guest access would be more appropriate
- Whether MFA is enforced
- Whether personal devices are being used
- Whether former staff, volunteers or IT providers still have access
- Who has Global Administrator or privileged access
For many charities, the biggest Microsoft 365 risk is not the licence cost. It is old access that remains active after people leave.
What to check before renewal
Before approving the next Microsoft 365 renewal, charity leaders should understand:
- Which users are on discontinued grant licences
- When those licences expire
- Which users need desktop Office apps
- Which users handle sensitive data
- Which users access Microsoft 365 from personal devices
- Which users need Business Premium security features
- Whether Intune, Defender or Conditional Access depends on current licences
- Whether trustees and volunteers have appropriate access
- Whether inactive accounts have been removed
- What risk is accepted if users are downgraded
Microsoft recommends transitioning users to another eligible Microsoft 365 nonprofit offer before the old subscription is cancelled to avoid service disruption or data loss.
How Sereno helps charities prepare
At Sereno, we support charities and nonprofit organisations with Microsoft 365 licensing, security and managed IT support, including charity-specific pricing for eligible organisations.
We can help identify affected licences, review whether Business Basic, Standard or Premium is the right fit, check security dependencies, review trustee and volunteer access, and build a renewal model that balances cost, productivity and protection.
You can also read our related guide on the wider 2026 Microsoft 365 pricing changes here: Microsoft 365 Price Increase 2026: Don’t Renew Before Checking This
For organisations that need ongoing support, Sereno also provides Microsoft 365 support services covering setup, security, user access, SharePoint, Teams, licensing and day-to-day Microsoft 365 support.
Final recommendation
The best Microsoft 365 renewal plan for a charity is not always the cheapest licence mix.
It is the licence mix that gives each person the right tools, protects sensitive information, removes unnecessary access and supports the organisation’s security requirements.
Business Basic remains valuable where the role is low risk and web-based tools are enough.
Business Standard can be appropriate where desktop Office apps are needed and the user’s security exposure is lower.
Business Premium should be prioritised where users handle sensitive data, work remotely, use managed devices, require stronger threat protection or hold elevated access.
Before changing licences, charities should review users, devices, permissions and security controls. A downgrade should only happen once the organisation understands what protection could be affected.
If your charity is affected by the Microsoft 365 nonprofit licensing changes, Sereno can review your current setup and recommend a renewal model that balances cost, productivity and security.
