Microsoft 365 Charity Licences: What's Changing for Trustees
Charity staff working on a laptop, planning Microsoft 365 licence changes in calendar.

Microsoft 365 Charity Licences: What Trustees in England and Wales Need to Know

Microsoft 365 charity licences are changing, and for many organisations in England and Wales this is the biggest shift in their core technology for a decade. For years, charities have quietly built their entire digital operation on top of Microsoft’s generous non-profit grants — desktop Office apps, Teams, advanced security, device management — all provided free for up to 300 users under the Microsoft 365 Business Premium grant, or the older Office 365 E1 grant. That chapter has now closed.

On 1 July 2025 Microsoft discontinued both grants. Existing licences have been winding down on each charity’s renewal date ever since, and by mid-2026 almost every organisation that relied on them has either transitioned or is in the middle of doing so. If your charity is still running on the legacy grant and your renewal hasn’t hit yet, the clock is ticking; if you’ve already been auto-moved to a paid or reduced plan, there are still decisions in front of you.

This post is written for trustees, Chief Executive Officers (CEOs) and senior leaders. It isn’t an Information Technology (IT) manual — it’s a governance brief on what’s changing, what your realistic options are, and what you should be pressing your team (or your IT partner) to do now.

What’s Changing With Microsoft 365 Charity Licences

Microsoft’s position is straightforward. The free Microsoft 365 Business Premium grant and Office 365 E1 grant for non-profits were discontinued on 1 July 2025. On your charity’s next renewal date on or after that date, those licences simply do not renew.

In their place, Microsoft continues to offer two things to eligible charities:

  • Up to 300 granted (free) licences of Microsoft 365 Business Basic. This is a cut-down, web-and-mobile plan. You still get Exchange email, Teams, OneDrive, SharePoint, and browser/mobile versions of Word, Excel and PowerPoint — but no installed desktop apps, no Microsoft Intune device management, no Microsoft Defender for Business, and none of the advanced identity and information protection features that sat inside Business Premium.
  • Discounts of up to 75% on most other Microsoft 365 non-profit Stock Keeping Units (SKUs), including Business Standard, Business Premium and Office 365 E1. You can still buy these — you just pay for them now.

Eligibility for the free Business Basic grant, and for the discounts, still runs through the Microsoft Nonprofit Hub, which in England and Wales relies on your Charity Commission registration. Nothing has changed there.

Why This is a Trustee Issue, Not Just an IT Issue

It is tempting to treat Microsoft 365 charity licences as a software problem for whoever runs your laptops. They aren’t. Three governance angles make it squarely a board matter. If your board would benefit from a refresher on those wider duties, our trustee support and training pages set out what good governance looks like in practice.

  1. Cost. A charity with 30 staff that was getting Business Premium free is now looking at roughly £50–£60 per user per year if it moves to Business Basic paid equivalents, or several times that to retain Business Premium at the nonprofit discount. For a such a charity that can easily be £2,000–£8,000 of new recurring cost that wasn’t in last year’s budget.
  2. Cyber and data-protection risk. Business Premium’s real value wasn’t the desktop apps — it was the security stack: Defender for Business for endpoints, Intune for managed devices, Microsoft Entra ID P1 (formerly Azure Active Directory Premium) for conditional access and enforced Multi-Factor Authentication (MFA), and Microsoft Purview for information protection. If you drop to Business Basic and change nothing else, you have materially weakened your technical controls. Given trustees’ duty to safeguard charity assets and beneficiaries’ data under the United Kingdom General Data Protection Regulation (UK GDPR), that is a risk decision — not a technical one — and it needs to be recorded and signed off. The Information Commissioner’s Office (ICO) publishes helpful guidance on the technical and organisational measures trustees are expected to have in place.
  3. Continuity. Microsoft requires charities to perform the transition manually through the Microsoft 365 admin centre. If nobody does it before the renewal date, licences expire, mailboxes and files go into a grace period, and after that you risk losing data. This is a live operational risk that boards should be assured is being managed.

Your Options for Microsoft 365 Charity Licences

There are broadly four routes. Most charities end up combining them.

  1. Move everyone to the free Business Basic grant. Cheapest option and the path of least resistance. It works if your staff are comfortable living entirely in the browser and on mobile, your device security is handled some other way, and you don’t need desktop Outlook, advanced compliance or device management. For very small charities with 1–10 staff and modest data sensitivity, this is often a defensible choice.
  2. Mix grants with paid licences. Give Business Basic (free) to volunteers, trustees and light users. Pay the discounted price for Business Standard (adds desktop apps) or Business Premium (adds security) only for the staff who actually need them — typically the CEO, finance, fundraising, safeguarding leads and anyone handling sensitive data. This is the route most medium-sized charities are settling on, and it usually produces the best value.
  3. Stay on Business Premium, pay the nonprofit price. Keep your security posture unchanged and absorb the cost. Worth modelling properly: the 75% discount makes this more affordable than people assume, and the saving from not having to retool security elsewhere is real.
  4. Move off Microsoft altogether. Google Workspace for Nonprofits is still free for eligible charities and offers a genuine alternative for email and collaboration. Migration is a project in its own right — budget for data migration, retraining, and loss of deep Office compatibility — so this is rarely the right answer purely because of Microsoft’s price change, but it belongs on the option list.

What You Need to Do Proactively

If you do nothing else after reading this, make sure the following five things are happening.

  1. Confirm your renewal date. Your IT lead or partner can find it in the Microsoft 365 admin centre under Billing → Your products. Everything downstream keys off this date.
  2. Commission an impact assessment covering cost, features lost, and security gaps — and have it presented to the board or finance/risk subcommittee. Don’t accept a purely technical recommendation; insist on the risk and cost framing. The National Cyber Security Centre (NCSC) Small Charity Guide is a useful reference point for what “good” looks like.
  3. Decide your target mix of licences before the renewal hits, not after. Auto-cancellation is not a strategy.
  4. Plan the manual transition in the admin centre: provision the new licences, reassign users, then cancel the old subscription. Microsoft’s step-by-step transition guidance walks through this in detail. If you have more than 300 users on the old grant, Microsoft will talk to you directly via the Tech for Social Impact (TSI) Partner Desk; for everyone else, a Microsoft Cloud Solution Provider (CSP) partner — many of which specialise in UK charities — will do it for a modest fee and will often identify further savings. UK-specific tech advice and discounted licensing is also available through Charity Digital Exchange and the sector guidance at Charity Digital.
  5. Reassess your security controls. If you’re dropping from Business Premium to Business Basic, either budget separately for endpoint protection and MFA enforcement, or accept the residual risk explicitly at board level and record it on your risk register. The Charity Commission’s guidance CC3: The Essential Trustee sets out the governance expectations here. 

The Bigger Picture

The shift in Microsoft 365 charity licences is part of a wider pattern: the era of blanket free enterprise software for the sector is ending, and charities are being asked to behave more like paying customers who happen to qualify for a discount. That is uncomfortable, but it is also an opportunity. The charities that come through this well will be the ones that stop treating IT as a silent background utility and start treating their digital estate — licences, security, data, skills — as core infrastructure worth planning and governing like any other. Your renewal date is as good a starting point as any.

If you’d like to talk this through with someone before your renewal, get in touch with the RCVDA team — we support charities across our area on exactly these sorts of decisions, and we can help you scope the work or introduce you to a trusted Microsoft partner.

Ready to do the migration? Read our step by step transition guide.

Sources and further reading:

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