Over 170k Nonprofits Lost All Their Data. Is Microsoft to Blame?

By Nitish Pahwa

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Aug 18, 20265:40 AM

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Ronald Khosla, a erstwhile rootlike husbandman and tech entrepreneur, keeps things elemental astatine his nonprofit: He’s the co-founder, president, and caput of IT for Canopy, a humble task patient that offers superior to startups trying to protect and prolong our earthy world.

“There’s nary paid staff, and we mostly support niche tech projects, for illustration group exploring caller ways to sphere trees successful Morocco aliases to regeneratively regrow a pasture successful Oregon,” Khosla told me.

Keeping specified a sparse, specified cognition going intends narrowing budgets wherever possible, particularly erstwhile it comes to managing Canopy’s investments and data. For that, he’s depended for years connected special licenses Microsoft has granted to smaller-size nonprofits astir the world, offering them a premium suite of Office apps (Word, Excel, OneDrive) astatine nary charge.

At least, he did until June 11, erstwhile Khosla logged connected to find that each the Canopy information stored pinch Microsoft had been deleted. He instantly called the tech company’s support staff, who said Canopy could retrieve its files. Later, they called backmost to pass him that, actually, those were gone forever.

What happened to Khosla was conscionable 1 lawsuit of a situation that has rocked small nonprofit owners crossed the globe, who allege that Microsoft grounded to pass pinch them successful a substantive manner astir the licence cancellations and near them incapable to hole their organizations for the future. As they’ve related online, these already resource-strapped nonprofits person mislaid troves of data, are struggling to proceed their operations, and person been near incapable to dress up the exertion gaps pinch replacement services. People who tally work orgs pinch debased budgets and benefited for years from Microsoft’s programs nary longer person overmuch of the exertion they request to support things going—for either the short aliases agelong term.

Khosla had seen Microsoft’s announcement past year that it was winding down its free nonprofit licenses opening July 2025, but, per the record, he should person still been successful the clear. He renewed Canopy’s yearly licence past October, and Microsoft had emailed him to corroborate he would clasp entree until Oct. 4, 2026. Khosla had nary logic to expect thing would change, and he received nary further warnings—even arsenic Microsoft kept successful regular touch astir different package updates. And he later learned he wasn’t alone, erstwhile different institution work typical called the very adjacent time and told him that astir 171,000 mini nongovernmental organizations “lost everything” successful their OneDrive accounts.

In a connection emailed to Slate, Microsoft wrote that the original offers were “retired to streamline our assistance offerings and simplify our assistance portfolio,” adding, “We powerfully advised our nonprofit customers and partners to modulation to a different Microsoft 365 connection for nonprofits earlier their renewal day to debar disruption and information loss.”

Khosla forwarded maine the first email he had received, successful May 2025, informing him: “The Microsoft 365 Business Premium assistance will beryllium discontinued connected your adjacent renewal connected aliases aft July 1, 2025. Your licenses will expire connected October 4, 2025.” But, erstwhile Khosla renewed the licence for different year, location was nary further accusation connected the phaseout process successful that confirmation email (which Khosla besides forwarded to me), and location were nary follow-up reminders sent aft that.

One root who said to maine connected the information of anonymity runs a kid healthcare statement that mislaid everything; having sifted done the org’s email archives, spam and everything, he recovered “zero notification” from Microsoft astir the licence termination, moreover though he kept receiving charismatic invoices listing $0 package charges. Another told maine she was capable to prevention the information for her D.C. nonprofit acknowledgment to the thief of an IT patient she contracts with, but insisted that neither she nor her tech squad received immoderate beforehand notice. On Reddit, and crossed Microsoft’s own Tech Community forums, more specified claims abound of astonishment deletion without notification. (Microsoft stated that it “began notifying nonprofit customers successful Spring 2025” and offered “support” passim the modulation period.)

This was not a cosmopolitan experience. Some commenters noted that they had received a May 2025 connection from Microsoft informing of the coming assistance phaseout, and others acknowledged occasional reminders to that effect; they were capable to migrate their information to different platforms successful a timely fashion. But 1 region humanities nine head based successful Minnesota said she ne'er sewage a azygous reminder aft the May email. Some clients complained that moreover if Microsoft reached out, the messages seldom made sense. On the forums wherever Microsoft’s nonprofit cancellations were initially discussed successful 2025, a personification wrote that they’d assumed that those alerts were spam because Microsoft, astatine that time, was still promoting the free nonprofit grants connected its website. The assistance rollback was technically nationalist information, but fewer would person known to look retired without an emailed heads-up, and less still would person known wherever to find it, arsenic it was not truthful prominently published alongside the corporation’s front-page, A.I.-emphasizing property releases. (As the D.C. nonprofit worker said: “If I don’t deliberation that there’s going to beryllium a change, why would I spell show Microsoft’s page?”)

George Weiner, a nonprofits master who runs the trading consultancy Whole Whale, was made alert of Microsoft’s assistance retractions from the very beginning, only by happenstance. “The announcement was buried connected some info page and passed astir by clients who were like, ‘Is this for real?’ ” he told me. “For a programme that’s been astir since 2013, it was shocking that you’d travel crossed its cancellation, effectively, successful the area of the bowels of a subpage of the internet.”

Weiner, who has managed literate nonprofits successful the past, was good alert of really Microsoft’s change-up would impact the 400,000 mini orgs that had taken advantage of the program, and tried to raise broader awareness. The sweeping mostly of American nonprofits run pinch annual budgets nether $1 million; the worth they sewage from Microsoft’s free business package equated to astir 30 percent of their IT spend, he told me.

“Microsoft wasn’t giving overmuch of an off-ramp, and they were dropping their information package during a captious clip for nonprofits, erstwhile we’re seeing A.I.’s expertise to penetrate much organizational infrastructure,” said Weiner. “They chiefly emailed the nonprofits’ administrative accounts, and they were rolling disconnected astir 33,000 organizations per month. It would beryllium very easy for personification to spell connected picnic astatine the incorrect clip and travel backmost only to wonderment what happened to each their data.”

It was, indeed, very easy to miss the warnings. The admin emails to which Microsoft sent those notifications thin to get slammed pinch junk from spammers, starring package developers to urge ignoring those inboxes altogether. One source, who helps his mother tally a disablement services nonprofit and said to maine connected the information of anonymity, told maine he had each cardinal nonprofit communications from Microsoft, including tech support, directed to a Gmail address, since neither he nor his mother recovered the Outlook interface intuitive aliases useful. (“Nothing other came to that email isolated from for our invoices, which ever publication $0.”) After the nonprofit’s information was purged successful June, he realized that he’d gotten 2 emails informing astir the impending licence suspension to his admin account, which did not automatically guardant to his Gmail, and which he could not position connected Outlook’s desktop interface—only connected the web app. (I asked my different sources if they’d double-checked their ain administrative addresses, and they insisted nary warnings had travel through; Microsoft did not reside my queries regarding the building of the admin accounts.)

The Big Tech behemoth did not connection a logic to maine arsenic to why it pulled the plug connected a wide utilized programme and past rendered its clients’ information irretrievable, beyond its already-professed extremity of “streamlining” and “simplifying” its grants. Weiner suspected it was successful portion political, a measurement to sidestep Trump management scrutiny complete inadvertent Microsoft support for orgs the authorities did not like. But the institution still does connection nonprofit services. The rumor is that once-free premium features are fenced disconnected astatine higher prices, and the more-cost-effective options activity obscurity adjacent arsenic well. The D.C. nonprofit proprietor told maine that her squad has been moving pinch online versions of Office apps, alternatively of their desktop counterparts, and has recovered that documents will often clang and suffer activity if aggregate group collaborate connected a fixed project.

The discourse surrounding Microsoft’s determination gives immoderate clues. The PR trade-offs of nonprofit support are very different now from erstwhile Microsoft began offering these grants successful 2013. At that time, charitable giving was trendy successful the tech sector, pinch brands for illustration Microsoft boasting of their employees’ multimillion-dollar donations—complete pinch matching funds—and the companies’ ain philanthropic efforts. In much caller years, arsenic Microsoft has struggled to drawback up successful the A.I. title and faced public skepticism complete its purported societal justness commitments, the institution has refocused connected supercomputing and connected chiefly appeasing the man who could thief this pursuit (President Donald Trump), immoderate the costs. Hence, “donations” were redirected toward Trump’s inauguration fund and the White House ballroom, while expenses were slashed crossed myriad non-A.I.-specific divisions: video gaming, marketing, and LinkedIn, for example. Meanwhile, Microsoft desperately needs more room for information storage arsenic A.I. is added into each its awesome products. We’ve already seen Big Tech names like Meta and Google erase personification information and enforce limits connected virtual retention arsenic A.I. expenditures balloon and representation becomes much expensive.

The mini nonprofits near down are now visibly struggling. The puerility healthcare nonprofit usability I said to mislaid astir 500 gigabytes of his firm’s data—which he didn’t backmost up externally because OneDrive offered automatic backup syncing—as good arsenic entree to 2 peculiar apps, Power Automate and Forms, that he recovered useful for handling affairs pinch donors. (“There’s nary easy aliases speedy replacement that we tin make activity successful the short term.”) The man who runs the disablement services nonprofit wrote to maine that it’ll return him and his mother “hundreds of hours” to afloat re-create the instructional videos and documents that went poof.

For his part, Ronald Khosla happened to support up a yearly wont of storing each Canopy information successful an outer difficult drive, because “Microsoft does not make backup easy,” he told me. That thrust is physically stored connected the East Coast—across the state from wherever he resides, successful Oregon, which intends he’ll person to make a formation to reconstruct said information onto a different unreality supplier while rejiggering his nonprofit’s package library. “Multiple group request entree to that data, truthful we’re each successful limbo until I alert back,” he said. “We’re losing clip and money, but we are going to survive.”