Microsoft Ends Free M365 Business Premium and Office 365 E1 Licenses for Nonprofits

Microsoft Ends Free M365 Business Premium and Office 365 E1 Licenses for Nonprofits

Microsoft has announced that it will no longer offer free Microsoft 365 Business Premium and Office 365 E1 licenses to nonprofit organizations.

Instead, eligible nonprofits will now be offered up to 300 free Microsoft 365 Business Basic licenses. However, these licenses only allow access to Office applications via the web and do not support the full desktop versions on PC, which may present some inconveniences.

As a result, nonprofits may have to either pay for additional features or turn to free or open-source alternatives.

According to Microsoft, the decision is part of an effort to streamline its donation offerings and simplify its portfolio of nonprofit grants. While the company will still provide a limited number of free licenses, it will now offer significant discounts—up to 75%—on other plans, including Microsoft 365 Business Premium and Office 365 E1.

The Business Basic plan, though free for up to 300 users, does not include desktop versions of Office apps or features like Microsoft Intune. Users can only access Word, Excel, and PowerPoint through a web browser on Windows 10 or 11. To use the full desktop versions of these applications, nonprofits would need to pay for a higher-tier subscription.

Given the typically limited budgets of nonprofit organizations, this change could push many to seek alternative software solutions, especially as the web-only access may not fully meet their operational needs.

Some nonprofits have also criticized Microsoft for giving short notice before ending the free licenses, leaving them little time to find alternatives or plan a transition. In the short term, many may turn to open-source office suites as a practical workaround for desktop use.

Microsoft emphasized that its goal with these changes is to help nonprofits benefit from industry-leading solutions that ensure high levels of security and productivity. The company stated that providing access to these tools is essential for supporting the broader social impact of nonprofit work.

Microsoft Ends Free M365 Business Premium and Office 365 E1 Licenses for Nonprofits. Microsoft has announced that it will no longer offer...

What is Office 365 E1 Licenses

Office 365 E1 is an enterprise-level subscription plan offering web-based access to core Microsoft Office productivity tools and cloud services. It is intended for organizations that prioritize accessibility and collaboration without requiring full desktop app installations.MicrosoftMicrosoft Learn

Core features include:

Online versions of Office apps (Word, Excel, PowerPoint, Outlook, OneNote)
Business-class email via Exchange Online
1 TB of OneDrive for Business cloud storage
Collaboration tools like SharePoint, Yammer, Teams (license required), Planner, Stream, Sway, Forms, Power Apps, Power Automate, Viva (Engage & Insights), Bookings, DelveMicrosoftCDWAce Cloud HostingMicrosoft Learn
Included support (phone/web), enterprise-grade security layers, and a financially backed 99.9% uptime guaranteeMicrosoftsoftsolutionworks.com
Workflow and automation enhancements and an AI-powered chat experience (Copilot Chat) with more advanced agents available via separate Azure callsMicrosoft+1

Pricing

Approximately US $7.75 per user/month under an annual commitment (auto-renews)Microsoft+1
Other sources also reference pricing around US $8–10/user/month, depending on vendor and currency (e.g., CAD)Encore Business SolutionsNakivoCDW

Comparison: E1 vs E3 vs E5

Feature	E1 (Web-only)	E3 (Includes Desktop Apps)	E5 (Advanced Security & Analytics)
Office apps	Web versions only	Web + Desktop apps (installable)	Web + Desktop apps
Installable software	–	Yes, up to 5 devices	Yes
OneDrive storage	1 TB	1 TB (upgradeable)	Same as E3
Security & compliance	Basic	Rights Management, DLP	Advanced protection, eDiscovery, BI
Analytics	Limited	Moderate	Includes Power BI Pro, MyAnalytics
Price (USD/month)	~$8–10	~$20–23	~$35–38

E1 is ideal for basic collaboration and simplicity.
E3 adds rich desktop experience and deeper compliance tools.
E5 offers enterprise-grade security, analytics, and communication capabilitiesEncore Business SolutionsNakivoMicrosoft LearnMicrosoft.

Important Notes & Updates

Branding: Microsoft has gradually transitioned to the Microsoft 365 brand. However, Office 365 E1 remains in use, particularly in enterprise and legacy offeringsWikipedia.
E1 Grant Termination (Unofficial): There’s mention on Reddit that “Office 365 E1 grants” may be discontinued in November 2025—likely referring to free or special-use grants—not the commercial subscription itself. Treat this with caution and verify through official Microsoft channelsReddit.

In Summary

Office 365 E1 offers a cost-effective, cloud-first way for enterprises to empower collaboration and productivity with web apps and core services. If your organization needs: