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Microsoft Resolves O365 Charity Licensing Issue for Churches!

July 12, 2023


Jonathan Smith is the President of MBS, Inc. and the Director of Technology at Faith Ministries in Lafayette, IN.
He is an author and frequent conference speaker.

You can reach Jonathan at and follow him on X @JonathanESmith.

Copyright © 2024 Jonathan Smith. All Rights Reserved.

Latest Update
July 12, 2023 – original article below

MBS is blessed to have been used by God in this situation.  We continue to pray that Google will reconsider their decision.

Microsoft still provides exemptions for churches in their nonprofit licensing but they regularly move the content around.  On the FAQ page you can find the exemption for churches still exists, based on the laws of your country.  Currently in the United States, churches are exempt and thus still be able to discriminate in hiring practices.  Here is a screenshot of where you can find the exemption for religious organizations on the FAQ page.

© 2015 by Nick B. Nicholaou, all rights reserved
Ministry Business Services, Inc. President
Reprinted from CT's online magazine

Many Christian churches and ministries have been uncomfortable with the Microsoft charity licensing program for Office 365 because it requires them to certify they don’t discriminate in their employment practices regarding lesbian, gay, bisexual, and transgender (LGBT) people. On October 8, 2015, Microsoft addressed these concerns and posted changes to its policy on their website!

The Original Problem?
Microsoft previously placed this restriction for its Office 365 (O365) charity licensing program:

“Organizations that engage in discrimination in [employment practices] based on… gender identity or expression… [or] sexual orientation… other than as allowed by law are not eligible to participate in this program.”

Many organizations that discriminated in these areas applied for the program and were approved. The reason they were approved is that Microsoft felt this was a self-certification. Microsoft never intended to police it, since even Microsoft couldn’t identify exactly where the law was on these issues. Its intent was simply to be inclusive.

In my role as a speaker, journalist, and consultant, I have been raising awareness of this issue– not saying an organization needed to be on one side of it or the other, but simply making certain that if an organization did discriminate in their employment practices regarding LGBT issues, that it needed to be aware of what it certified.

Many responded by saying they love those in the LGBT community and want to minister to them, so they weren’t sure this was an issue for them. My response would be to ask them how they would handle a senior member of their church’s leadership coming out of the closet. For those who did discriminate in employment regarding LGBT issues, but wanted to certify that they did not, it would raise questions about integrity, and possibly even some questions about legal liability (the risk of certifying no discrimination to maintain eligibility for the charity program, but then terminating someone because of this issue).

The Resolution Process
After speaking on the topic at The Church Network annual conference this summer, an individual came forward and told me he knows a VP at Microsoft who goes to their church and might be able to help resolve this. He asked if I would be interested in pursuing a conversation. That led to a teleconference with Microsoft’s director of business operations and its lead counsel for corporate citizenship, the very two people who could address this! (As big as Microsoft is, that in itself was miraculous!)

In the call I suggested there were two reasons Microsoft might want to consider changing its wording:

  1. Microsoft is a business with a conscience, and that’s good. But Microsoft was, with the existing wording, making it very uncomfortable for hundreds of thousands of Christian organizations to use its solution, and that may not be the business decision they intended.
  2. Microsoft was pursuing inclusion by excluding a large percentage of the population.

We talked through many scenarios of unintended consequences. They thanked me and said they’d let me know what they decided.

The Final Resolution
On October 7, 2015 they emailed me to let me know the changes they were making, and asked that I wait for the changes to go live on their website before making an announcement. Microsoft added a statement to their website that says (see under Anti-Discrimination Policy):

“The only exception to this [anti-discrimination] policy is for religious organizations that are exempt from laws that prohibit such discrimination.”

Microsoft also added a three-point FAQ that explained its intention. The FAQ clarifies why Microsoft is excluding religious organizations. It also answers two important questions about how to determine if an organization may be exempt from discrimination laws and whether Microsoft will be policing compliance. The FAQ can be found at under Resources for Nonprofits.

This allows churches to act in accordance with their legally protected religious convictions and not feel required to certify something that may not be true for them.

The value of the program cannot be understated. The Office 365 program has a variety of options, but the two most commonly used by churches either reduce the cost from $8/month/user (E1) to free, or from $20/month/user to $4.50 (E3). (See The savings are substantial.

What About Google Apps?
Google still has its restrictions in place for charity licensing, which can be found at Churches that want to use Google’s business tools under their charity licensing program should note these restrictions.

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