The Microsoft Nonprofit Grant Changed. Here's Your 2026 Playbook

The Grant That Quietly Expired

On 1 July 2025, Microsoft retired the two grants that thousands of nonprofits were built on: the free licences of Microsoft 365 Business Premium and the free Office 365 E1 plan. There was no switch-off day and no dramatic announcement that anyone remembers reading. Each organisation simply lost its grant at the next renewal after that date, which means NPOs have been discovering the change one anniversary at a time, some of them only this year. The unlucky ones found out when licences failed to renew and staff suddenly could not open Outlook.

The replacement offer is not bad. It is just different, and it requires a decision instead of a default. The free tier is now Microsoft 365 Business Basic for up to 300 users: business email on your own domain, Teams, OneDrive, SharePoint and the web and mobile versions of Word, Excel and PowerPoint. What it no longer includes is the installed desktop apps, or the security and device management tools that made Business Premium so valuable. Those now cost money, at a discount of roughly 75 percent off commercial pricing, which currently works out to about 5.50 US dollars per user per month for Business Premium on an annual term.

If your organisation is still coasting on an old grant, or recovering from losing one, this is the playbook we walk South African nonprofits through in 2026.

Why the Change Caught So Many NPOs Off Guard

Commercial licensing changes get announced, budgeted and argued about. Nonprofit grant changes tend to land on whoever happens to read the admin centre notifications, which in a small NPO is often nobody. Three things made this transition messier than it needed to be.

• The rolling deadline: Nothing broke on 1 July 2025 itself. Grants expired at each organisation's individual renewal date over the following twelve months, so there was no shared moment of alarm and no colleague at another NPO warning you in time.
• The invisible dependency: Many organisations set up their free licences years ago, often through a volunteer or a long-departed IT person. Nobody documented that the entire email system depended on a grant that needed periodic re-attestation. When the renewal lapsed, so did the mailboxes.
• The security cliff: Business Premium quietly included serious protection: device management through Intune, advanced phishing defence, conditional access. Organisations that dropped to free Business Basic kept their email and lost their armour, usually without realising it. For an NPO holding beneficiary records and donor banking details, that is a POPIA problem waiting for a headline.

The Decision Framework: Free, Premium or Google

The right answer depends on how your team actually works, not on which logo you prefer. We ask three questions: who needs desktop apps, who touches sensitive data, and what are you doing about marketing?

• Stay free on Business Basic if: your team lives in a browser. Email on your own domain, Teams meetings, shared files and the web versions of Office cover the daily reality of most small NPOs, and 300 free users is more than most will ever need. The catch is that web Excel will frustrate anyone who builds serious spreadsheets, and there are no offline apps for fieldwork or load shedding.
• Pay for discounted Business Premium if: people manage donor financials in desktop Excel, work offline, or carry laptops holding beneficiary information. Premium adds the installed Office apps plus the security layer: enforced device encryption, mobile device management, advanced threat protection and conditional access. At roughly 75 percent off, it is the cheapest complete security stack a nonprofit can buy, and far easier to defend to a board than a breach is to explain to the Information Regulator.
• Look at Google if: your team is browser-first anyway and marketing matters to your mission. Google's free nonprofit tier is also browser-based, so on everyday apps it is a like-for-like trade, but Google adds something Microsoft does not: the Google Ad Grant, worth up to 10,000 US dollars per month in search advertising. Our separate guide to Google Workspace for Nonprofits covers it in detail, including the hybrid approach where you run Microsoft for email, identity and operations and claim a Google nonprofit account specifically for the Ad Grant.

Remember this is not one decision for the whole organisation. The licence mix is the point: free Basic for the many, discounted Premium for the few who genuinely need it. A 20-person NPO might only need Premium for four people.

The Application Path for South African Nonprofits

Getting the discount is a sequence, and skipping steps is the main cause of delays.

• Get your paperwork straight first: For South African organisations, eligibility generally means holding recognised nonprofit status: an NPO registration with the Department of Social Development, a nonprofit company (NPC) registration, public benefit organisation approval from SARS, or standing as a charitable trust. Your legal name, registration number and address must match across your documents, because mismatches are the most common reason validation stalls.
• Register with Microsoft for Nonprofits: Registration runs through Microsoft's own nonprofit portal. You complete a registration form, attest to the nonprofit compliance policy, and your details go to Microsoft and its validation partners for review. Straightforward cases clear in a few business days; if the validators ask for supporting documents, expect longer. TechSoup stopped performing validation reviews for Microsoft in 2025, so this now happens on Microsoft's side. TechSoup's South African arm, SANGOTeCH, is still well worth registering with separately, because it remains the gateway to donated and discounted software from many other vendors.
• Enrol through a Microsoft partner: Once validated, the free Basic licences and the discounted paid plans become available as nonprofit offers. Most NPOs buy them through a Microsoft Cloud Solution Provider partner, which lets you mix free and discounted licences on one tenant, get local billing in rand, and have someone accountable when renewals come around.
• Deploy it properly: The licence is the start, not the finish. Multi-factor authentication on every account, sensible sharing controls and working backups should go in on day one, not after the first phishing incident.

The Mistakes We Keep Seeing

Most nonprofit licensing pain in 2026 is self-inflicted, and all of it is avoidable.

• Letting the grant lapse silently: Nonprofit offers require periodic re-attestation, and renewal reminders go to whichever mailbox registered the account, sometimes a volunteer who left in 2021. Put the renewal date in the organisation's calendar and make a named person responsible for it.
• Paying for ghost licences: When Premium was free, nobody cared that former staff still held licences. Now every unused seat is money out of your programme budget. Audit your users before every renewal and reclaim what is not in use.
• Treating security as optional: Free Business Basic still includes multi-factor authentication, which blocks the overwhelming majority of automated account attacks, yet we routinely find NPO tenants with it switched off. Donors do not distinguish between a small charity and a big company when their details leak.
• Running two email systems: Claiming the Google grant is smart; splitting your email between Google and Microsoft is not. Pick one platform for email and identity, and use the other for what it uniquely offers.
• Applying the week you need it: Validation is quick when documents are in order and slow when they are not. Start the process a month before you need the licences, not the day the old ones expire.

Budgeting the Transition in Rand

The maths is friendlier than the shock of losing a freebie suggests. Discounted Business Premium at about 5.50 US dollars per user per month lands somewhere in the region of R100 per user per month, depending on the exchange rate on the day. A 15-person NPO that keeps ten people on free Basic and puts five on Premium is looking at roughly R6,000 a year, for software a commercial business would pay several times as much for.

Three budgeting notes. First, nonprofit pricing is typically billed on an annual term, so treat it as a yearly line item rather than a monthly nibble. Second, the price is dollar-based, so build in headroom for the rand. Third, the wider ecosystem still exists: Azure credits for eligible NPOs, discounted Copilot, and steep nonprofit discounts on tools from Adobe to Canva to Zoom. The Business Premium change is a reason to review the whole stack, not just one licence.

Present it to your board as what it is: a new, modest cost that buys the security and productivity your donors already assume you have.

The Bottom Line

The free lunch got smaller, but the nonprofit deal is still one of the best in software: free email and web apps for up to 300 people, and the full professional stack at a quarter of the commercial price. The organisations that struggle in 2026 are not the ones paying for Premium. They are the ones who never noticed the grant changed, never assigned an owner to the renewal, and never turned the security on.

If you are not sure where your organisation stands, it is worth finding out before your renewal date does it for you. We handle eligibility checks, applications and implementation for South African nonprofits every week, from validation paperwork to choosing the right licence mix, and the first conversation costs nothing.