Major Microsoft 365 Licensing Changes for NFPs - What Your Charity Needs to Know in 2025

Overview: What Are the 2025 Microsoft Licensing Changes for NFPs?

If your not-for-profit (NFP) or charity relies on free Microsoft 365 services, significant changes are coming from 1 July 2025. Microsoft is updating its licensing model for nonprofit organisations worldwide, including Australia.

Free Microsoft 365 Business Premium & Office 365 E1 Grants Are Ending

Key Change:

From 1 July 2025, Microsoft will retire the free grant-based licences for:

∙ Microsoft 365 Business Premium

∙ Office 365 E1

These grants have been widely used by charities across Australia, offering up to 10 free user licences for premium Microsoft services.

After July 2025, these plans will no longer be available for renewal, and your organisation will need to switch to alternative offerings.

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What Will Still Be Free for Nonprofits?

Microsoft will continue to provide Microsoft 365 Business Basic at no cost, for up to 300 users.

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What's Included in Microsoft 365 Business Basic (Free):

∙ Web and mobile versions of Office apps (Word, Excel, PowerPoint)

∙ Outlook and Exchange (email hosting)

∙ 1TB OneDrive cloud storage per user

∙ Microsoft Teams

∙ SharePoint

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What’s Missing:

∙ No desktop Office apps

∙ No advanced security or device management

∙ No Microsoft Defender or Intune

For many NFPs, these missing features could mean the free version won’t be enough.

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What Are the Paid Options for NFPs in 2025?

If your organisation needs desktop apps, advanced features or security tools, you’ll need to transition to a discounted nonprofit licence. What Will Still Be Free for Nonprofits?

Microsoft will continue to provide Microsoft 365 Business Basic at no cost, for up to 300 users.

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What's Included in Microsoft 365 Business Basic (Free):

∙ Web and mobile versions of Office apps (Word, Excel, PowerPoint)

∙ Outlook and Exchange (email hosting)

∙ 1TB OneDrive cloud storage per user

∙ Microsoft Teams

∙ SharePoint

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What’s Missing:

∙ No desktop Office apps

∙ No advanced security or device management

∙ No Microsoft Defender or Intune

For many NFPs, these missing features could mean the free version won’t be enough.

What Are the Paid Options for NFPs in 2025?

If your organisation needs desktop apps, advanced features or security tools, you’ll need to transition to a discounted nonprofit licence.

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Microsoft 365 Paid Plans for NFPs:

How to Prepare for the Microsoft NFP Licensing Transition

Here’s how your organisation can prepare to avoid disruption:

1. Audit Current Microsoft Usage

∙ Identify what plans you're currently on

∙ Count users and usage type (e.g. web vs desktop apps)

2. Map Critical Features

∙ Do you rely on desktop Office apps?

∙ Is security (like MFA or Defender) a must?

3. Decide: Free vs Paid

∙ Can Business Basic meet your needs?

∙ Or do you need to budget for discounted Business Premium?

4. Plan Your Migration

∙ Time the transition around your renewal date

∙ Back up all data

∙ Test user access before switching

5. Budget Ahead

∙ Get quotes for NFP pricing on Premium plans now

∙ Include ongoing software costs in your next FY budget

What Does This Mean for Australian Charities and NFPs?

For many Australian NFPs, Microsoft’s free licensing changes could lead to:

∙ New costs for previously free services

∙ IT system reviews to see if Microsoft is still the right fit

∙ A chance to modernise systems with cloud-first and secure-by-default setups

It’s not just a licensing change, it’s an opportunity to streamline and secure your digital environment.

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How Peppermint iT Helps NFPs Navigate Microsoft Changes

As a trusted IT partner for Australian not-for-profits, Peppermint iT offers:

✅ Licensing audits & recommendations​

✅ Transition support for Microsoft 365​

✅ Security and compliance alignment​

✅ Budget-friendly cloud migration services​

✅ Ongoing support & training for your team

We understand the sector and the constraints charities work within. Let us help you move forward with clarity.

Important Dates to Remember

Ready to Review Your Microsoft 365 Setup?

Don’t wait until the last minute. Schedule a no-obligation consultation with Peppermint iT today and get a customised Microsoft 365 plan for your nonprofit’s future.

Contact us to start your transition.​

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