Microsoft 365 Nonprofit Price Increases Are Coming

price increase

Written by Dan Callahan

I am a Senior Technical Advisor to CGNET. Formerly, I managed our Cybersecurity and Cloud Services businesses, and provided consulting to many clients over the years. I wear a lot of hats. Professionally, I'm a builder of businesses. Outside of work, I'm a hobby farmer, chef, skier, dog walker, jokester, woodworker, structuralist, husband and father.

March 31, 2022

Microsoft 365 nonprofit price increases are coming. You know this if you read the email Microsoft sent last week. If you missed it, I will recap here.

This is not breaking news. (Is it just me, or does it seem like all news these days is “breaking news?”) I wrote a couple of posts (here and especially here) about this topic last year. I would love to say “I told you so” about these Microsoft 365 nonprofit price increases. But I cannot do that. In fact, I told you that the prices for your existing Microsoft 365 subscriptions would not increase.


To be fair (to me LOL), Microsoft did tell me that Microsoft 365 nonprofit price increases would only apply to purchase of new subscriptions. Someone at Microsoft must have had a rethink about this.

The Details on Microsoft 365 Nonprofit Price Increases

Here is are the Microsoft 365 nonprofit price increases for a selection of plans.

  • Office 365 E1 increases from $2 to $2.50
  • Office 365 E3 increases from $4.50 to $5.75
  • Office 365 E5 increases from $14 to $15.20
  • Microsoft 365 Business Premium increases from $5 to $5.50

The price increases range from meh to OMG, depending on the subscription. On a dollar basis, the increases seem tame. Then again, this is your budget I am talking about.

When will these Microsoft 365 nonprofit price increases take place? The price increases will apply at your next subscription renewal, on or after September 1, 2022. If you have other questions about this, Microsoft has a nice FAQ page on the subject here.

What Action Should I Take?

The most important action to take right now is budgetary. Update your annual subscription costs to reflect the Microsoft 365 nonprofit price increases if your budget year starts on or after September 1st. If your budget year is already underway on September 1st, plan to ask for a budget increase. Or look for ways to reduce your expenses elsewhere. (Except CGNET-related items of course 😊)

Should you change Microsoft 365 subscriptions? No. If you have an Office 365 E3 subscription, the closest alternative is Microsoft 365 Business Premium. You would be trading a subscription costing $5.75 per user for one costing $5.50 per user. The $0.25 per user savings per month would not justify the hassle of changing subscriptions.

(By the way: If you have zero-cost Office 365 E1 subscriptions, get in touch. I am confirming the details, but I know what steps you need to follow to keep these free.)

(3/30 UPDATE: Microsoft confirmed to me that if you have the original E1 grant (free) subscriptions, these will renew at the same [no] cost. Your other subscriptions will renew at the new costs.)

Use Them or Lose Them

One other step you will want to take in responding to Microsoft 365 nonprofit price increases: make sure you are using your E1 licenses. As I wrote about here, Microsoft is cracking down on organizations that have unused (unassigned or assigned but no usage) E1 licenses. Microsoft is looking to see that 85% or more of these E1 licenses are being used. If your organization is using less than 85% of these licenses, it could jeopardize your Microsoft nonprofit status.

In short, if you have unused E1 licenses, give them back to Microsoft. You do this by changing your total license quantity in the Microsoft 365 Administration console. Ask me for help if you are not sure what to do here.

Return Unused Licenses Before September 1st

Be sure to make this adjustment before September 1st if possible. Why? Let me tell you. In other parts of Microsoft’s cloud world, Microsoft is changing the rules for how Microsoft partners acquire and manage Microsoft 365 licenses. The biggest change is that partners will have to pay when customers reduce their license count before the license agreement expires.

Here is an example. A customer buys 100 Microsoft 365 licenses from CGNET, an annual plan. Three months later, the customer returns 50 of the licenses, owing to a change in business conditions. Previously, Microsoft would refund CGNET, who would refund the customer. Now, CGNET refunds the customer (or refuses to take the licenses back). I heard an explanation as to why this might make business sense, but I cannot share it with you. I will just say the policy is likely to stick. And while this policy does not apply to nonprofit subscriptions now, who know what the future holds. So, act now, while operators are standing by (as they say) if you have unused licenses you want to return considering these Microsoft 365 nonprofit price increases.

Hit the Easy Button with CGNET Billing

If all this Microsoft 365 subscription management is giving you a headache, I have a solution. Buy your Microsoft 365 (and Azure) subscriptions through CGNET. Most of our customers are billed directly by Microsoft since that was the only choice in the early days of Microsoft 365. But now it is possible to purchase your licenses from CGNET (who buys them from a Microsoft distributor). We have the flexibility to help manage your license counts, as well as line up all your subscriptions to a common renewal date. If you are interested in this, let me know.

Meanwhile, prepare for these Microsoft 365 nonprofit price increases.

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