Thousands of nonprofits allegedly lose all data stored on Microsoft OneDrive
Over 170,000 nonprofit organizations may be affected.
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- Some nonprofits say they lost OneDrive data after Microsoft ended free Microsoft 365 and Office 365 grant licenses.
- Venture firm Canopy says Microsoft deleted its files months before its confirmed October 2026 access date.
- About 171,000 small non-governmental organizations lost OneDrive files.
- Microsoft says it warned nonprofits to switch plans, but missed emails left some organizations unable to operate.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
Nonprofit organizations whose data is lost for good say Microsoft failed to adequately warn them about expiring licenses.
For years, nonprofit organizations have relied on Microsoft grants, which provide their software free of charge.
After the grant program was retired in June 2026, some non-profits reported losing all their data and being unable to find alternatives to Microsoft services. As a result, some are struggling to continue their operations, Slate reports.
Microsoft announced in May 2025 that it is ending the grant licenses for Microsoft 365 Business Premium and Office 365 E1 software, warning that renewals of these services after July 1st that year would no longer be free.
The company said that grants for Microsoft 365 Business Basic, which offers up to 300 free licenses, will remain available. Other plans will be offered at discounted pricing.
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For some, Microsoft’s decision to discontinue license grants came as an unpleasant surprise.
Ronald Khosla, co-founder and head of IT for Canopy, a venture firm that offers capital to nature-protecting startups, told Slate that his organization renewed the license last October. Microsoft then confirmed that he would retain access until October 4th, 2026.
When Khosla logged on June 11th, 2026, he found out that all the Canopy data stored with Microsoft had been deleted. The company initially said that retrieving files was possible, but later informed Khosla that they were gone forever.
Another company service representative told Khosla that roughly 171,000 small non-governmental organizations lost all their files in their OneDrive accounts.
A person who spoke to Slate on the condition of anonymity said their healthcare organization for children lost 500 gigabytes of its data and access to 2 apps without being notified of the termination of its license.
Discussions on Reddit and Microsoft’s Tech Community reveal that others received a warning from Microsoft in May 2025 and migrated their data to other platforms on time.
Some, however, say that Microsoft’s admin emails often end up in the spam folder, which may explain why organizations missed the warning messages.
In a written statement to Slate, Microsoft said the grant was “retired to streamline our grant offerings and simplify our grant portfolio.”
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.Microsoft
Microsoft grants are discontinued as the nonprofit sector is undergoing an existential crisis.
As many as 73% of organizations report an increased demand for services, while their staff is shrinking and getting burned out. At the same time, the funding is harder to obtain from both government and foundation sources.