Microsoft ended the free 10-user Business Premium grant for nonprofits on 1 July 2025. If your organization was running on it, that is the single most important cloud fact of the last two years, and a lot of DC nonprofits still have not been told.
Most cloud writing aimed at nonprofits explains what IaaS, PaaS, and SaaS stand for and stops there. That is not the decision anyone is actually facing. The real questions are which licences to buy now that the grant is gone, what belongs in the cloud and what does not, and which security responsibilities remain yours after you sign. This page covers those.
What changed with Microsoft's nonprofit licensing?
As of 1 July 2025, Microsoft no longer grants free Microsoft 365 Business Premium or Office 365 E1 licences to nonprofits. Organizations holding those grants lose them at their next renewal date.
What Microsoft offers eligible nonprofits now, from its own offers page:
- Microsoft 365 Business Basic free for up to 300 users, which covers web and mobile apps, Teams, 1 TB of storage per user, and baseline security. No desktop Office apps.
- Microsoft 365 Business Premium at $5.50 per user per month, billed yearly, which is roughly a 75 percent discount. Desktop apps plus the security tooling most organizations actually need.
- Microsoft 365 E3 at $9.75 and E5 at $24 per user per month, billed yearly.
- Microsoft 365 F3 at $2.50 per user per month for frontline staff who mostly need email and Teams.
Our position on the trade: if you were on granted Business Premium, moving everyone to free Business Basic to preserve the zero on the invoice is usually the wrong call. Business Premium is where Intune device management, Defender for Business, and conditional access live. Dropping to Basic does not just cost you desktop Office, it removes the controls that make a distributed nonprofit defensible, and at $5.50 per user it is the cheapest security you will ever be offered. The better move is Business Premium for staff who handle donor, financial, or member data, and F3 or Basic for people who only need email.
Check TechSoup as well, for donated and discounted licensing across other vendors, and Google Workspace for Nonprofits if you are on that stack instead. Eligibility rules differ from Microsoft's.
Do you need IaaS, PaaS, or SaaS?
Almost certainly SaaS, and mostly one of it. Microsoft 365 and Google Workspace are software-as-a-service, and for a nonprofit under a few hundred people they are the cloud strategy. The other two categories matter only in specific cases.
Infrastructure-as-a-service, meaning virtual machines you administer, earns its place when you have a line-of-business application that will not run anywhere else. Association management systems and older grant or case management software are the usual culprits. Platform-as-a-service matters if you are building something custom, which most organizations your size should not be doing.
The distinction matters for exactly one reason, which is the next section.
What security is still yours after you move?
More than most boards assume. Microsoft publishes a responsibility matrix, and the pattern in it is consistent: as you move from on-premises to IaaS to PaaS to SaaS, Microsoft takes over the physical datacenter, the network, the hosts, and eventually the operating system. Four things never transfer, in any model.
- Your data, including how it is classified, encrypted, and governed.
- Your configurations and settings. A misconfigured tenant is your incident, not Microsoft's.
- Your identities and users. Account lifecycle is yours.
- Your access management, including multifactor authentication, role assignments, and conditional access.
Client devices are shared in SaaS and fully yours everywhere else. Applications are shared in PaaS and SaaS.
This is why "we moved to the cloud so we are covered" is the most expensive sentence in nonprofit IT. Nearly every incident we are called into involves one of those four never-transfers: a password with no second factor, an over-permissioned guest account, a sharing setting nobody reviewed, or an admin account that four people use.
What should move to the cloud, and what should not?
Move email, files, and collaboration. That decision is settled and there is no good argument left for running your own mail server.
Be more careful with these:
- Anything with a hardware dependency. Building access control, phone systems tied to physical lines, lab or AV equipment. Check what breaks when the internet does.
- Large media libraries. Program video and photo archives are cheap to store and expensive to move repeatedly. Decide where they live once.
- Applications with a licensing model that punishes virtualization. Some association management vendors still price this way.
- Anything under a grant or contract clause specifying data location or handling. Read the agreement before the migration, not during it.
Public, private, and hybrid is mostly a distinction that matters to organizations larger than this. If someone is selling you a private cloud for a 40-person nonprofit, ask them to name the specific requirement driving it.
How long does a cloud migration take?
For a typical nonprofit of 10 to 75 people moving email and files, plan on weeks rather than months, with the caveat that the work is mostly not technical.
The file copy is the easy part. What takes the time is deciding how shared content should be structured on the other side, because a migration is the one moment you can fix fifteen years of accumulated folder sprawl and nobody gets a second chance at it. Skipping that step is how organizations end up paying for SharePoint and using it as a file share.
ETTE delivers migrations as fixed-price projects, which we do specifically so the scoping conversation happens before anyone commits money. Our SharePoint migration case study covers one of these end to end. Every managed engagement also opens with a 30-day Smooth Start at no additional cost that documents your environment before anything moves, and in one case a DC advocacy firm was fully transitioned off its previous provider in 17 days.
What does cloud actually cost a nonprofit?
Three lines, and organizations routinely budget for one.
Licensing is the visible line, and after nonprofit discounts it is usually the smallest. At $5.50 per user per month, Business Premium for a 40-person organization is about $2,640 a year.
Management is the line that gets missed. Someone has to run identity, patch devices, review sharing settings, respond when a staff member is locked out at 8 AM, and produce evidence when a funder asks about your controls. ETTE managed plans start at $125 per user per month remote-only and $150 fully managed, with nonprofit rates on both and the help desk staffed Monday through Friday, 7 AM to 7 PM ET.
Migration is a one-time line, scoped per project. Insist on a fixed price rather than hourly. Hourly billing on a migration puts your interests and your provider's in opposition.
Where to start
If you are still on a granted Business Premium licence, find your renewal date first. That is the deadline everything else works backwards from, and it is the one thing on this page with a clock attached.
After that, the useful first step is an inventory rather than a product decision: who has accounts, what data sits where, which systems were adopted outside IT, and which of the four never-transfer responsibilities above currently has nobody's name on it. The readiness assessment covers the same ground quickly, and the cloud, productivity, and backup operations page describes what we run. For nonprofits specifically, our nonprofit page has more on budget-aware and board-ready reporting.
Microsoft licensing figures and the responsibility matrix in this article were verified against Microsoft's nonprofit offers page and Azure shared responsibility documentation in August 2026. Microsoft has changed nonprofit licensing recently and may again; confirm current pricing and eligibility before purchasing.