Microsoft's retired nonprofit grant reportedly wiped data for over 170,000 organizations

What happened

On June 11, Ronald Khosla logged into his Microsoft account and found that every file his organization had stored with the company had been erased. Khosla co-founded Canopy, a nonprofit with no paid staff that invests in small environmental technology projects, and he manages its IT himself. According to Slate, which published a detailed account of the incident, Microsoft's support staff first told him the data could be recovered, then called back to say it was gone for good.

His experience is one instance of a much larger failure. A Microsoft service representative told Khosla that roughly 171,000 small nongovernmental organizations "lost everything" stored in their OneDrive accounts, Slate reports. The trigger was Microsoft's retirement of its free Microsoft 365 Business Premium grant for nonprofits, a program the company began winding down in July 2025. The story drew wide attention after reaching the front page of Hacker News.

The timeline matters. Khosla received an email in May 2025 saying the grant would end at his next renewal and that his licenses would lapse on October 4, 2025. He renewed in October anyway, and Microsoft's confirmation, an email Slate reviewed, stated he would keep access until October 4, 2026. No follow-up reminders ever arrived, he says, even as Microsoft kept sending him routine product updates. The deletion came months before the expiry date Microsoft had put in writing.

Warnings that did not land

Microsoft maintains that customers were informed. In a statement to Slate, the company said the offers were "retired to streamline our grant offerings" and that it had strongly advised nonprofits to move to a different Microsoft 365 offer before their renewal date. It also said it began notifying nonprofit customers in spring 2025 and offered support throughout the transition.

Some organizations did get the message: commenters cited by Slate said the May 2025 email, plus occasional reminders, gave them enough time to migrate. Others describe a very different experience. The operator of a child healthcare organization, who spoke anonymously, searched his mail archives including spam and found no notice at all, even as Microsoft kept sending invoices showing $0 charges. A Washington, D.C. nonprofit director avoided losing her data only because her contracted IT firm stepped in, and says neither she nor that team received advance warning. Similar complaints have piled up on Reddit and on Microsoft's own Tech Community forums. One forum user said he had treated the alerts as spam, because Microsoft was at the same time still advertising the free grants on its own website.

The scale of the shutdown

The grant program dated back to 2013, and around 400,000 small organizations had used it. George Weiner, who runs the nonprofit consultancy Whole Whale, told Slate that most American nonprofits operate on annual budgets under $1 million, and that the value of Microsoft's donated software amounted to roughly 30 percent of a small nonprofit's typical IT spend. He also noted that Microsoft sent its notices to admin accounts, inboxes usually buried under spam, while rolling about 33,000 organizations off the program each month, leaving almost no margin for anyone who missed a single message.

Why it matters

This is one of the largest data-loss incidents tied to a cloud deprecation, and it shows that a free or donated tier can end with customer data destroyed rather than migrated. It also exposes the limits of written vendor commitments: a renewal confirmation naming an expiry date did not protect Khosla's files. For organizations running on granted or discounted cloud licenses, the practical takeaways are blunt. Maintain independent backups, make sure deprecation notices reach an inbox someone actually reads, and treat phase-out announcements as firm deadlines rather than distant paperwork. The episode also illustrates lock-in: nonprofits that built a decade of operations on a free grant had no leverage when it ended, and Slate's reporting suggests many now lack both the budget and the technical capacity to replace what they lost.