What is Happening with Microsoft Nonprofit Cloud Subscriptions?

Welcome to another “nuts and bolts” post. (It could be worse. I could be sharing pictures of me in various Scottish castles.) During the recent (extremely awesome) TAGReconnect meeting in San Francisco, I was talking with a customer that was trying to understand whether they should be changing their Microsoft nonprofit cloud subscriptions. As we talked through the considerations, I decided that there was enough complexity here to warrant a blog post on the topic.

First, I want to explain my terminology. I am using “Microsoft nonprofit cloud subscriptions” to refer to the myriad nonprofit SKUs (stock-keeping units) that Microsoft offers. This includes

• Microsoft 365 Business Basic NFP (not-for-profit)
• Microsoft 365 Business Premium NFP
• Office 365 Enterprise E1 NFP
• Office 365 Enterprise E3 NFP
• Office 365 Enterprise E5

And many others.

Microsoft has announced changes to its nonprofit support program. I detailed some of these changes here and here. These changes are relevant to most of our nonprofit customers since you all are typically holding Office 365 Enterprise E1 NFP and E3 NFP subscriptions. Microsoft is encouraging nonprofits to standardize on its Microsoft 365 Business Basic NFP and Business Premium NFP subscriptions. As a result, IT Managers are raising the “should I stay, or should I go” question (with apologies to The Clash). Do I stay with my E1 and E3 subscriptions? Or do I change to Business Basic and Business Premium?

It is a complicated question. Allow me to come at an answer from a few directions. Feel free to use our handy Contents feature to jump around the article as you like.

No Price Increases!

Let me pause and give you some good news. CGNET is part of a “Tech for Social Impact” (aka TSI because Microsoft) group and Microsoft has told me (and a few others LOL) that there are NO nonprofit price increases planned for the nonprofit subscriptions. Some of the for-profit subscriptions are seeing a price increase, so this is great to hear.

If You Use E1 Licenses for Some Staff

Here is our first consideration for sorting out Microsoft nonprofit cloud subscriptions. Do you use E1 NFP licenses? These are the “free” ones that have most everything except rights to download Microsoft Office. Some of our NGO customers use E1 licenses for drivers, security guards and other staff that have few needs for cloud services beyond email and chat. Some nonprofits use E1 licenses for interns or volunteer staff.

If you use these licenses, go ahead and keep your E1 NFP subscription. Or swap them out for Microsoft 365 Business Basic NFP. The subscriptions are virtually identical, and both are free.

If you do keep your E1 NFP subscriptions, be aware of a few things.

• Microsoft will be checking to see that 85% of your E1 NFP subscriptions are being used. I believe they are checking to see if the licenses are assigned to actual users. If they find that you have more than 15% of these licenses in reserve, they may ask you to give them up. Read my article here for more on that.
• As of this past July 1^st, you cannot add new E1 NFP licenses to your subscription. You can buy the rack-rate E1 licenses (thanks?). And you can get the E1 NFP licenses as part of an Enterprise Agreement. But Enterprise Agreements are for organizations with more than 250 employees. If you think you need an Enterprise Agreement you probably already have one.

No Takebacks

I have said it before, but I will repeat it. Microsoft will not be forcing customers to get rid of E1 NFP (with one exception, see below) or E3 NFP subscriptions. Whatever you have, you can keep. As long as this is the case, I do not see a compelling reason to swap out your Microsoft nonprofit cloud subscriptions.

OK, there may be one case. Read to the end.

Should I Swap Out My E3 or E5 Subscriptions?

Let me take each of these Microsoft nonprofit cloud subscriptions in turn. For Office 365 E5 NFP, there is no Microsoft 365 Business equivalent. Are you using E5 subscriptions (and we encourage it, for security if nothing else)? Keep doing that.

If you are using an Office 365 E3 NFP subscription, I will give you a qualified thumbs up for continuing to use it. Here is why I say that. Microsoft has not announced that these E3 SKUs can no longer be ordered. (I am checking to confirm this.) So, why change them out if you do not need to do that?

There are not many differences between E3 NFP and Business Premium NFP. (I have chart I can share if you want to see the details). But there is one that might matter to you. Business Premium NFP mailboxes are limited to 50 GB, while E3 mailboxes are “unlimited.” 50 GB is plenty of room for most folks, but you may well have some staff that have saved all their email for the last twenty years.

Are You Planning to Grow in 2022?

This is a great question, and one that I had not considered during my recent TAGReconnect conversation. You have options here, so no need to pull out the worry beads. First, you can (as I understand) continue to purchase E3 NFP licenses. Or you could just as easily purchase Business Premium NFP licenses. You just cannot add the E1 NFP licenses.

Speaking of growth, be aware of this one hard-and-fast distinction between “Business” and “Enterprise” when it comes to Microsoft cloud nonprofit subscriptions. The “Business” SKUs allow for a maximum of 300 users. The “Enterprise” SKUs have no maximum user count. If you think you are approaching that 300+ staff threshold, steer to the E3 NFP or E5 NFP SKUs.

Can I Mix “Business” and “Enterprise” Subscriptions?

Yes, you can mix “Business” and “Enterprise” subscriptions. Way back when, you could not do this. Thankfully, Microsoft resolved this roadblock. If you do find yourself contemplating a mix of “Business” and “Enterprise” subscriptions, you need not worry. You do, however, need to remember that there are some feature and capacity differences between the Business Essentials or Business Premium NFP subscriptions and the E3 or E5 NFP subscriptions.

If Payables for Your Microsoft Nonprofit Cloud Subscriptions is a Hot Mess

When Microsoft started its program offering discounted Microsoft nonprofit cloud subscriptions, organizations had to get them directly from Microsoft. This changed after a few years, and Microsoft partners could sell these subscriptions directly to nonprofits.

We considered running a program to move our customers’ Microsoft nonprofit cloud subscriptions over to CGNET. The problem we had was that we did not see a compelling reason for customers to do that.

Well, here is a compelling reason. Billing alignment.

Over time, customers have added various Microsoft nonprofit cloud subscriptions to their service. All well and good. However, each subscription often has its own billing date (and renewal date). What was initially a once-a-month or annual payment to Microsoft splintered into multiple payments over multiple months. Accounts Payable is not happy!

At CGNET, we have the flexibility to line up all your subscriptions to a single (or at least a small number of) billing cycle(s). And, although you can pay CGNET by credit card, you can also pay by wire transfer or check. If you want to get back in good graces with Accounts Payable, let me know and we can take care of things for you.

Do You Want Some Personal Attention?

If you have read this post to the end, thank you! If you are still feeling like you are not sure about your best options to stay ahead of these changes, let me know. I would be happy to review your licensing situation and tell you what I think. You know where to find me!