Microsoft Will Raise Prices for Nonprofits and End On-Prem Grants

3 min read
April 18, 2022
In March, Microsoft made a number of changes to its licensing and pricing for Office 365 and Microsoft 365 business subscriptions. Now, effective September 1, 2022, Microsoft will raise prices for nonprofits as well, as the company recently announced. Here's a breakdown of the price increases, the reasoning behind them, and why they're being raised now.

The Amounts Microsoft Will Raise Prices for Nonprofits

Nonprofit organizations will see their subscription prices rise in September, with the amount depending on the SKU. The updated nonprofit pricing for these products will be:
  • Microsoft Office 365 E1: from $2.00 to $2.50
  • Microsoft Office 365 E3: from $4.50 to $5.75
  • Microsoft Office 365 E5: from $14.00 to $15.20
  • Microsoft 365 E3: from $8.00 to $9.00
  • Microsoft 365 Business Premium: from $5.00 to $5.50
Most of these increases are roughly in line with the commercial increases that other businesses saw in March---about 10-15% more than the previous cost. The Office 365 E1 and E3 subscriptions, though, are being raised the most at 25-28% more. The upside is that all of these nonprofit prices are still a significant savings from commercial prices, most of them 75% less than their commercial counterparts. See how Microsoft's solutions also offer capabilities unique to nonprofits.

Why Are Prices Being Raised Now for Nonprofits?

As Microsoft has pointed out, it has added 1,400+ features and 24 apps to its products over the last eleven years without any significant price increases. Some of the big additions in recent years have been the Microsoft Teams app, greater automation & AI, and improved security tools. Specifically for Business Premium, the following have been added over the years since the license was first introduced:
  • Azure Active Directory (Azure AD) Premium Plan 1
  • Azure Information Protection Premium Plan 1
  • Office 365 DLP
  • Microsoft Defender for Office 365 Plan 1
  • Shared Computer Activation
  • Azure Virtual Desktop (formerly Windows Virtual Desktop)
  • Universal Print
Other competitors have raised their prices over the last decade, including during the hardships of the Covid-19 pandemic. Microsoft held off during that time but has now expressed a feeling that the signs of economic recovery this year have made it acceptable to finally raise theirs. On top of waiting for the commercial increases, they delayed the nonprofit increase by an additional six months after those ones in order to give nonprofit organizations enough time to transition to the cloud if they hadn't yet.

Switch to the Cloud-First Grant Program

That transition to the cloud is something that Microsoft is incentivizing. Along with pricing changes, they've started a new cloud-first grant program and will no longer offer on-prem software grants to nonprofits. This was originally announced in October 2021 and is effective this month, April 2022. Those nonprofits who are moving to the cloud and applying for grants can still lock in old subscription pricing meanwhile, before September 1. And for licenses that are themselves offered as grants, the pricing won't be affected in September. These grant offerings include 10 licenses of Microsoft 365 Business Premium, 300 licenses of Microsoft 365 Business Basic, and 2,000 licenses of Microsoft Office 365 E1 via Enterprise Agreement.

Questions About the Changes?

Both monthly and annual payment options will be affected by this price increase. Standalone SKUs, on the other hand, will not be affected at this time. If you have any other questions about specific licenses or changes, see Microsoft's Frequently Asked Questions document.

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