Microsoft 365 Business Premium vs E3 for nonprofits.

Since Microsoft ended the free Business Premium grant on July 1, 2025, most nonprofits pay for every seat above free Business Basic. That makes the choice between Business Premium and E3 a real budget line rather than a default. The two plans overlap more than their names suggest, and for many organizations the deciding factor is not features at all but headcount.

Prices below are Microsoft’s published US nonprofit prices, per user per month, paid yearly on an annual commitment. Microsoft notes they are for information only and can change, so confirm any figure at purchase. For the wider picture (grants, Copilot, Azure, and eligibility), see our guide to Microsoft licensing for nonprofits in 2026.

The short answer.

• Under 300 people, choose Business Premium for staff who need the desktop apps plus device and data protection. It costs less than E3 and includes stronger endpoint protection than E3’s base plan.
• At or near 300 people, plan for E3 or E5. The Business plans stop at 300 seats in total, and the free Business Basic grant counts toward that number.
• Choose E3 under 300 only when you need something specific to it: more cloud storage per user, Windows Enterprise, or the volunteer F3 seats that come with E3 and E5.
• Everyone else who only needs web and mobile apps can stay on free Business Basic.

The 300-seat line decides more than features do.

Microsoft designs the Business plans for organizations with up to 300 users, and the limit is on the whole family: an organization may provision up to 300 seats in total across Business Basic, Business Standard, and Business Premium. Microsoft reserves the right to enforce it. A tenant with 250 Business Premium seats can add only 50 more Business seats of any kind, granted Business Basic included.

Microsoft’s enterprise plans, E3 and E5, list no user limit. Microsoft’s own guidance for an organization that grows past 300 describes a tenant holding both Business and E3 licenses for a while, and recommends moving to an enterprise plan at renewal. If you expect to cross 300 in the next year or two, price E3 now, so the move happens on your schedule rather than at a renewal deadline.

Published nonprofit prices.

Business Premium is $5.50 per user per month, which Microsoft describes as a 75% nonprofit discount. E3 is $9.75 and E5 is $24.00; Microsoft does not publish a discount percentage for either. Business Standard, the desktop apps without the security layer, is $3.50, and Business Basic is free for up to 300 users under the nonprofit grant. All are annual commitments.

So E3 costs $4.25 more per user per month than Business Premium, or $51 per user per year. For 100 users, that is $5,100 a year before any add-ons.

Side by side.

What Microsoft lists for each plan on its nonprofit pricing pages and in Microsoft Learn. E5 is included for reference.

Both plans include the same mailbox (100 GB, with a 1.5 TB archive), Teams, and Microsoft Copilot Chat (formerly Microsoft 365 Copilot Chat) at no extra cost. Both can take the paid Microsoft Copilot (formerly Microsoft 365 Copilot) add-on, which Microsoft prices for eligible nonprofits at $25.50 per user per month, paid yearly.

Security: where Business Premium is ahead of E3.

Identity is a tie: both plans include Microsoft Entra ID P1, which brings Conditional Access and multifactor authentication policies. Device management is close: both include Intune, and from July 2026 E3 adds Intune Plan 2 capabilities such as Remote Help and Advanced Analytics.

Endpoint security is where the cheaper plan wins. Business Premium includes Microsoft Defender for Business, which Microsoft builds for organizations of up to 300 users and which includes endpoint detection and response and automated investigation and remediation. E3 includes Defender for Endpoint Plan 1, which covers next-generation protection and attack surface reduction; endpoint detection and response arrives with Plan 2, which is part of E5. For an organization under 300, Business Premium is the stronger endpoint package at the lower price.

E3’s advantages are elsewhere: more storage per user, Windows Enterprise, the volunteer F3 seats, and no seat ceiling.

How to mix either plan with free Business Basic.

Very few nonprofits need the same license for everyone. The usual pattern is a paid plan for the people who handle sensitive records or need the desktop apps, and free Business Basic for everyone who works in a browser or on a phone.

• Business Basic plus Business Premium. The simplest mix for an organization under 300. Remember that both count toward the same 300-seat Business limit, so 220 Basic seats and 80 Premium seats fill it.
• Business Basic plus E3. Works where the paid group needs E3 specifically. The E3 seats do not count toward the Business limit, but the Basic seats still do.
• Mind who holds the free seats. Granted Business Basic licenses are for paid employees and unpaid executive staff, such as board members. Volunteers and temporary staff can hold discounted licenses, not granted ones.
• Keep the free seats in use. Microsoft expects 85% active usage of granted licenses and asks organizations to remove unused ones.
• Count the volunteer seats. Each E3 or E5 seat brings up to five Microsoft 365 F3 seats for volunteers, which can change the math for a volunteer-heavy organization weighing Business Premium against E3.

Where E5 and the Defender and Purview suites fit.

E5 at $24.00 is the full enterprise set: Entra ID P2, Defender for Endpoint Plan 2, Defender for Office 365 Plan 2, Purview Information Protection Plan 2, Purview Audit and eDiscovery at the Premium level, plus Teams Phone and Power BI. It suits organizations past 300 users with real compliance obligations, or a security team that will use the extra tooling.

For a Business Premium tenant, Microsoft sells three add-ons at a published 60% nonprofit discount: the Defender Suite (Entra ID P2, Defender for Identity, Defender for Endpoint Plan 2, Defender for Office 365 Plan 2, and Defender for Cloud Apps), the Purview Suite, and the two together. They are per-user, so you can buy them for finance, executives, administrators, and anyone with access to sensitive records, without moving the whole organization to E5.

On the enterprise side, Microsoft lists the Defender Suite as an add-on to E3, and the Purview Suite requires E3. Microsoft does not publish nonprofit prices for those combinations on its nonprofit pages, so ask your partner to quote them before comparing against E5.