If your charity accesses Microsoft 365 through a grant, there are some big changes you’ll need to be prepared for. Back in July 2025, Microsoft quietly announced that it’s in the process of retiring its free licensing tier for non-profits, and you’ll be moved to a discounted rate when your contract renews over the coming months. It’s part of a broader update to simplify Microsoft’s not-for-profit licensing model, but for smaller organisations, the shift could mean a noticeable jump in monthly costs.
What’s changing?
Until recently, charities could grab up to 20 free Microsoft 365 Business Premium licences, with discounted pricing for additional users. That free allocation is now being phased out. Going forward, all licences will move to Microsoft’s not-for-profit discount rate, with reductions of up to 75%.
On the whole, it’s a relatively fair deal. But for smaller charities that have been relying on those first 20 licences being completely free, the change could add around £80 a month to running costs. For larger organisations already paying for most of their licences, the difference will likely be negligible.
Why it’s happening
Microsoft says the change will ‘streamline its grant portfolio’ and ‘simplify the experience’ for non-profits. In practice, that means the company is getting rid of older, complex grant models like the Microsoft 365 Business Premium and Office 365 E1 grants. It’s focusing instead on offering up to 300 Business Basic licences alongside generous discounts across their higher-tier plans.
The goal, according to Microsoft’s Tech for Social Impact team, is to help charities maintain strong security and productivity while standardising how those benefits are delivered. It’s a logical move for Microsoft, but one that will land differently depending on the size and setup of each organisation.
What it means for you
If your charity’s 365 use depends entirely on the former grant model, this change could mean a noticeable increase in your monthly IT spend. However, we see this as an opportunity to review whether your current mix of licences still fits how your team works. You might find you don’t need the full Business Premium feature set – or you could see real benefits from upgrading to unlock new tools.
Here at Reliable Networks, we can help you review what you’re using, understand where your biggest savings are, and explore which licences make the most sense for how your charity works.
Don’t wait around
As you can probably imagine, Microsoft hasn’t been shouting about these changes from the rooftops, so many charities don’t yet know that anything’s happening. For a lot of organisations, changes won’t be spotted until the renewal comes through. And that leaves them at a disadvantage.
Now that you’re aware of what’s going on, you’ve got time to prepare before your renewal and find ways to save before the changes take effect. Our team understands that budgets are tight and every penny counts, so talk to us and see how we can work together to turn change into opportunity.
