Microsoft 365 for Nonprofits: Prices, Eligibility and What Changed

Microsoft 365 for nonprofits gives eligible charities Business Basic free for up to 300 users, and Business Standard and Business Premium at $3.50 and $5.50 per user a month on an annual commitment, 75% below the standard prices. The ten free Business Premium seats many guides still describe were discontinued from 1 July 2025. To qualify you need 501(c)(3) status or the local equivalent; schools, most hospitals and government bodies are excluded. Below are the current prices, what a year costs at 10 and 25 staff, how it compares with Google Workspace, and how to apply.

Microsoft 365 nonprofit pricing

US prices per user per month, paid yearly on an annual commitment, from Microsoft’s business and enterprise nonprofit pricing pages, against its standard prices for the same plans with Teams, read on 27 October 2026. The discount column is our calculation. Microsoft’s own summary on its updates page is “up to 300 granted licenses of Microsoft 365 Business Basic and discounts of up to 75% on many Microsoft 365 offers.” On monthly billing, the standard prices are higher still, for example $16.80 rather than $14 for Business Standard.

What changed in July 2025

Until mid-2025 the headline offer was free seats of Business Premium. Microsoft’s updates page says, under 1 July 2025: “The Microsoft 365 Business Premium grant has been discontinued. Your licenses will expire on your next renewal date and will not renew.” The Office 365 E1 grant was discontinued at the same time, with the FAQ allowing it only in limited cases through an Enterprise Agreement. In their place came the free Business Basic grant for up to 300 users and the discounted paid plans.

Two things follow for organizations that had the old grant. The switch is not automatic: Microsoft says licence transitions “must be completed manually in the Microsoft 365 admin center.” And any staff who relied on desktop Office or Premium’s security features through the grant now need a paid seat, or must move to the browser versions in Business Basic. Check your renewal date in the admin center and move people to their new plans before it arrives.

Which plan each person needs

Most small charities end up with a mix: Business Basic for staff and board members who work in a browser, and a few Business Premium seats for the people who hold donor, client or financial data on laptops and phones. Premium’s device management lets you wipe a lost laptop or require a PIN on a phone, which matters more than any feature in Standard if you handle sensitive records; nonprofit AI data security and case management software cover why. Mixing plans in one tenant is normal, and you only pay for the paid seats.

Microsoft Teams is included in the nonprofit plans. When Microsoft started selling Teams separately in 2024, its licensing notice said nonprofit-specific plans were “not currently impacted,” and the nonprofit plan listings all include Teams.

What a year costs

Our calculation, at the annual-commitment prices above. Google Workspace figures use its nonprofit prices of $3.50 a user a month for Business Standard and $6.16 for Business Plus, with Google Workspace for Nonprofits free, from our Google Workspace for nonprofits guide. The Google plans are not identical feature for feature, so treat the comparison as the cost of a similar tier, not a like-for-like match.

The pattern is simple. At the free tier both cost nothing. Once staff need desktop Office or stronger security, Microsoft’s nonprofit prices are slightly below Google’s for comparable seats. The deciding factor is usually what your staff already use and what your other software connects to, not the price difference, which is a few hundred dollars a year at most for a small organization. Budget it under technology in the nonprofit budget.

Who is eligible

Microsoft’s eligibility page covers nonprofits and NGOs “with recognized legal status in their respective countries (equal to 501(c)(3) status under the United States Internal Revenue Code),” plus public libraries and public museums. Its examples of ineligible organizations include:

• nonprofits without recognized legal status;
• governmental organizations or agencies, including international bodies and UN entities;
• schools, colleges and universities, including nonprofit schools and academic museums;
• healthcare organizations, except the types listed below;
• public utilities, financial institutions, and professional, commerce and trade associations;
• professional and semiprofessional sports organizations;
• political, labor and fraternal organizations, refurbishers and individuals.

Healthcare is the exception that differs most from Google. Microsoft accepts US independent Critical Access Hospitals and Rural Emergency Hospitals that are not part of a health system, Federally Qualified Health Centers and Look-Alikes, nonprofit Rural Health Clinics, skilled nursing facilities and long-term care facilities. A general or system hospital is not eligible; see nonprofit hospitals for how those organizations differ.

How many organizations that leaves out

Counts from the IRS Exempt Organizations Business Master File, by subsection and by NTEE activity code, with bin/analyse_bmf_eligibility.py. NTEE codes are assigned by the IRS and are coarse, so the school and hospital rows are approximate, and some hospitals counted here are among the types Microsoft accepts. Private foundations are 501(c)(3)s and are not excluded. The 322,853 organizations that are not 501(c)(3)s are the largest group left out; types of nonprofits explains the categories. A school or hospital’s separate fundraising foundation is usually its own 501(c)(3) and is not a school or hospital itself, so check whether it qualifies.

The rules that come with the licences

• Staff only. Microsoft says “Volunteers, members and program participants of the nonprofit are NOT eligible for nonprofit licenses and subscriptions.” The same page describes up to five additional F3 seats for volunteers with each E3 or E5 seat, which helps only larger organizations on enterprise plans.
• Use them or lose them. The eligibility page lists “failure to maintain at least 85% active usage of all granted licenses” as abuse of the programme. Do not take 300 free seats for a staff of 12.
• One tenant. Each organization gets one validated grant tenant.
• Annual attestation. Organizations must regularly confirm they still meet Microsoft’s rules.
• Annual commitment. The discounted prices are for a yearly commitment, so add seats when you hire rather than in advance.

Copilot and Azure

Copilot Chat, the web-grounded assistant, is “included in your Microsoft 365 subscription at no extra charge.” The full Microsoft 365 Copilot, which works inside Word, Excel, Outlook and Teams with your organization’s files, is an add-on at $25.50 per user a month paid yearly, which Microsoft describes as a 15% nonprofit discount. That is more than four Business Premium seats, so trial it with a few people before buying it widely, and set rules for it first with an AI use policy. How it compares with other assistants is in ChatGPT for nonprofits and Claude for nonprofits.

Eligible nonprofits can also claim $2,000 of Azure credits a year, cut from $3,500 for renewals from 1 October 2023. The FAQ says unused credit does not roll over and a credit card is required in case usage exceeds the credit. It is useful for hosting a database or experimenting with AI services, and easy to overspend if a test is left running.

How to apply

1. Have your documents ready: the legal name exactly as the IRS holds it, your EIN, and your determination letter.
2. Apply at the Nonprofit Hub. Microsoft’s registration guide says to go to the Nonprofit Hub and select Apply, then give contact details, your EIN, a verified email, organization details including a website and a phone number that is not a VoIP line, and an admin account. If you already have a Microsoft 365 tenant, sign in with its admin credentials so the offer attaches to it.
3. Wait for validation. The sign-up page says Microsoft “contracts with TechSoup and their worldwide partner network to validate eligibility.” Microsoft gives two different times: up to 3 business days on its eligibility page, and up to seven business days in its FAQ.
4. Activate the offers in the Nonprofit Hub, then assign licences in the Microsoft 365 admin center.

Fiscally sponsored projects have no 501(c)(3) of their own, so they cannot apply on their own account. See fiscal sponsorship.

Microsoft 365 or Google Workspace?

• Choose Microsoft if your staff live in Excel and Word, your finance or case management software integrates with Outlook or Teams, you are an eligible rural or community health organization, or you want device management at $5.50 a seat.
• Choose Google if your team works mostly in a browser, shares documents with outside volunteers often, or wants the simplest admin. The Google Workspace guide covers its edition, prices and the 300-user cap on new accounts.
• Do not run both for email and files unless you have to. Two systems doubles the admin and splits your records.

Other programmes worth claiming at the same time are Canva for nonprofits and Google Ad Grants, which work alongside Microsoft 365. Staff training on Copilot and similar tools is covered in AI training for nonprofits.

Prices, plans and rules were read on Microsoft’s nonprofit and commercial pricing pages, its nonprofit offers, Microsoft 365, Azure and FAQ pages, and its Learn eligibility, registration and updates pages on 27 October 2026. Counts are from the IRS Exempt Organizations Business Master File. Microsoft changes its nonprofit offers periodically, so check the pricing page before you commit.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.