Nonprofits Report Major OneDrive Data Loss After Microsoft Grant Changes

Nonprofit organisations have reported losing access to OneDrive files after Microsoft ended some free Microsoft 365 and Office 365 grant licences. This OneDrive data loss has reportedly left some groups without important records and the tools they need for daily work.

Grant changes leave nonprofits without files

Microsoft retired free grants for Microsoft 365 Business Premium and Office 365 E1 in June 2026. It continues to offer free Microsoft 365 Business Basic licences to eligible nonprofits, while other plans are available at discounted rates.

However, some organisations say they did not realise their existing licences would expire or require a move to another plan. As a result, they lost access to services and files stored in OneDrive.

Microsoft said it had advised nonprofit customers and partners to move to another eligible Microsoft 365 offer before their renewal date. The company said doing so would avoid disruption and data loss.

Canopy says its OneDrive files disappeared early

Canopy, a venture firm that backs nature-focused startups, said Microsoft confirmed it would retain access to its licence until October 4, 2026.

However, the organisation’s co-founder said he logged in on June 11 and found that its Microsoft-hosted files had disappeared. He was initially told recovery was possible, but was later informed that the files were permanently deleted.

The reported OneDrive data loss included records crucial to the organisation’s operations.

Reports suggest thousands of groups may be affected

A Microsoft representative reportedly told Canopy that about 171,000 small non-governmental organisations had lost files from their OneDrive accounts. Microsoft has not publicly confirmed that figure.

Another nonprofit reportedly lost around 500GB of data and access to two applications. The group said it had received no notice that its licence would end.

Other organisations said they had received an earlier warning and moved their data before access ended. Yet some nonprofit administrators said Microsoft emails had landed in spam folders, meaning they did not see the alerts in time.

The reports show how OneDrive data loss can seriously affect smaller organisations that depend on donated cloud services. They also highlight the importance of maintaining independent backups for essential files.