The Quiet Decision Microsoft Made That Devastated Thousands of Nonprofits

The Industry Over 170,000 Nonprofits Lost All Their Data. Is Microsoft to Blame? When the tech giant retired a popular software grant, years of nonprofit data vanished with it. By Nitish Pahwa Enter your email to receive alerts for this author. Sign in or create an account to better manage your email preferences. Unsubscribe from email alerts Are you sure you want to unsubscribe from email alerts for Nitish Pahwa? Aug 18, 20265:40 AM Photo illustration by Slate. Photos by Getty Images Plus. Sign up for the Slatest to get the most insightful analysis, criticism, and advice out there, delivered to your inbox daily. Ronald Khosla, a former vegetable farmer and tech entrepreneur, keeps things simple at his nonprofit: He’s the co-founder, president, and head of IT for Canopy, a modest venture firm that offers capital to startups trying to protect and sustain our natural world. “There’s no paid staff, and we mostly support niche tech projects, like people exploring new ways to preserve trees in Morocco or to regeneratively regrow a pasture in Oregon,” Khosla told me. Keeping such a sparse, specified operation going means narrowing budgets wherever possible, especially when it comes to managing Canopy’s investments and data. For that, he’s depended for years on special licenses Microsoft has granted to smaller-size nonprofits around the world, offering them a premium suite of Office apps (Word, Excel, OneDrive) at no charge. At least, he did until June 11, when Khosla logged on to find that all the Canopy data stored with Microsoft had been deleted. He immediately called the tech company’s support staff, who said Canopy could retrieve its files. Later, they called back to inform him that, actually, those were gone forever. What happened to Khosla was just one instance of a crisis that has rocked small nonprofit owners across the globe, who allege that Microsoft failed to communicate with them in a substantive manner about the license cancellations and left them unable to prepare their organizations for the future. As they’ve related online, these already resource-strapped nonprofits have lost troves of data, are struggling to continue their operations, and have been left unable to make up the technology gaps with alternative services. People who run service orgs with low budgets and benefited for years from Microsoft’s programs no longer have much of the technology they need to keep things going—for either the short or long term. Khosla had seen Microsoft’s announcement last year that it was winding down its free nonprofit licenses beginning July 2025, but, per the record, he should have still been in the clear. He renewed Canopy’s yearly license last October, and Microsoft had emailed him to confirm he would retain access until Oct. 4, 2026. Khosla had no reason to expect anything would change, and he received no additional warnings—even as Microsoft kept in regular touch about other software updates. And he later learned he wasn’t alone, when another company service representative called the very next day and told him that roughly 171,000 small nongovernmental organizations “lost everything” in their OneDrive accounts. In a statement emailed to Slate, Microsoft wrote that the original offers were “retired to streamline our grant offerings and simplify our grant portfolio,” adding, “We strongly advised our nonprofit customers and partners to transition to a different Microsoft 365 offer for nonprofits before their renewal date to avoid disruption and data loss.” Khosla forwarded me the first email he had received, in May 2025, informing him: “The Microsoft 365 Business Premium grant will be discontinued on your next renewal on or after July 1, 2025. Your licenses will expire on October 4, 2025.” But, when Khosla renewed the license for another year, there was no additional information on the phaseout process in that confirmation email (which Khosla also forwarded to me), and there were no follow-up reminders sent after that. One source who spoke to me on the condition of anonymity runs a child healthcare organization that lost everything; having sifted through the org’s email archives, spam and everything, he found “zero notification” from Microsoft about the license termination, even though he kept receiving official invoices listing $0 software charges. Another told me she was able to save the data for her D.C. nonprofit thanks to the help of an IT firm she contracts with, but insisted that neither she nor her tech team received any advance notice. On Reddit, and across Microsoft’s own Tech Community forums, more such claims abound of surprise deletion without notification. (Microsoft stated that it “began notifying nonprofit customers in Spring 2025” and offered “support” throughout the transition period.) This was not a universal experience. Some commenters noted that they had received a May 2025 message from Microsoft warning of the coming grant phaseout, and others acknowledged occasional reminders to that effect; they were able to migrate their data to different platforms in a timely fashion. But one county historical society director based in Minnesota said she never got a single reminder after the May email. Some clients complained that even if Microsoft reached out, the messages rarely made sense. On the forums where Microsoft’s nonprofit cancellations were initially discussed in 2025, a user wrote that they’d assumed that those alerts were spam because Microsoft, at that time, was still promoting the free nonprofit grants on its website. The grant rollback was technically public information, but few would have known to look out without an emailed heads-up, and fewer still would have known where to find it, as it was not so prominently published alongside the corporation’s front-page, A.I.-emphasizing press releases. (As the D.C. nonprofit worker said: “If I don’t think that there’s going to be a change, why would I go monitor Microsoft’s page?”) George Weiner, a nonprofits expert who runs the marketing consultancy Whole Whale, was made aware of Microsoft’s grant retractions from the very beginning, only by happenstance. “The announcement was buried on some info page and passed around by clients who were like, ‘Is this for real?’ ” he told me. “For a program that’s been around since 2013, it was shocking that you’d come across its cancellation, effectively, in the corner of the bowels of a subpage of the internet.” Weiner, who has managed literary nonprofits in the past, was well aware of how Microsoft’s change-up would affect the 400,000 small orgs that had taken advantage of the program, and tried to raise broader awareness. The sweeping majority of American nonprofits operate with annual budgets under $1 million; the value they got from Microsoft’s free business software equated to about 30 percent of their IT spend, he told me. “Microsoft wasn’t giving much of an off-ramp, and they were dropping their security package during a critical time for nonprofits, when we’re seeing A.I.’s ability to penetrate more organizational infrastructure,” said Weiner. “They primarily emailed the nonprofits’ administrative accounts, and they were rolling off about 33,000 organizations per month. It would be very easy for someone to go on vacation at the wrong time and come back only to wonder what happened to all their data.” It was, indeed, very easy to miss the warnings. The admin emails to which Microsoft sent those notifications tend to get slammed with junk from spammers, leading software developers to recommend ignoring those inboxes altogether. One source, who helps his mother run a disability services nonprofit and spoke to me on the condition of anonymity, told me he had all key nonprofit communications from Microsoft, including tech support, directed to a Gmail address, since neither he nor his mother found the Outlook interface intuitive or useful. (“Nothing else came to that email except for our invoices, which always read $0.”) After the nonprofit’s data was purged in June, he realized that he’d gotten two emails warning about the impending license suspension to his admin account, which did not automatically forward to his Gmail, and which he could not view on Outlook’s desktop interface—only on the web app. (I asked my other sources if they’d double-checked their own administrative addresses, and they insisted no warnings had come through; Microsoft did not address my queries regarding the structure of the admin accounts.) The Big Tech behemoth did not offer a reason to me as to why it pulled the plug on a widely used program and then rendered its clients’ data irretrievable, beyond its already-professed goal of “streamlining” and “simplifying” its grants. Weiner suspected it was in part political, a way to sidestep Trump administration scrutiny over inadvertent Microsoft support for orgs the government did not like. But the company still does offer nonprofit services. The issue is that once-free premium features are fenced off at higher prices, and the more-cost-effective options work nowhere near as well. The D.C. nonprofit owner told me that her team has been working with online versions of Office apps, instead of their desktop counterparts, and has found that documents will often crash and lose work if multiple people collaborate on a given project.