Microsoft has admitted an error deleted some nonprofits' Microsoft 365 data before their retention period ended, and it cannot be recovered. Here is what happened and how to protect your own data.
In late September 2026, Microsoft confirmed that it had deleted Microsoft 365 data belonging to some nonprofit customers before their retention period had ended . Microsoft says the data cannot be recovered. It also says it cannot tell those organisations which data was removed, or whether anything was removed at all.
For charities that thought they still had time to export their files, that is a hard message to receive. It is also a lesson for any organisation that relies on Microsoft 365 (formerly Office 365) as the only place its data lives.
For years, eligible nonprofits could claim a Microsoft 365 Business Premium grant covering up to ten free licences. In 2025 Microsoft announced that the grant would stop renewing after 1 July that year. Organisations were offered up to 300 free Business Basic licences, or discounted pricing on paid plans such as Business Premium.
Microsoft advised affected organisations to move their users to another plan before the old subscription lapsed, or to export anything they wanted to keep. In principle, a retention window after the subscription ended gave them a safety margin.
According to press reports, that safety margin did not hold for everyone. Once the expired Business Premium subscriptions were terminated, an error caused remaining data to be deleted early. Microsoft said its recovery attempts had failed. A spokesperson confirmed that "an error resulted in remaining data, if any, being deleted before the retention period had ended."
Microsoft has not said how many organisations were affected, how early the deletion happened, or what caused it. Its offer to affected nonprofits is a free "concierge" session to help them set up a new Microsoft 365 environment. That helps with starting again. It does not bring the old data back.
It is tempting to treat this as a one off problem with a retired grant. The bigger point applies to every Microsoft 365 customer: a retention period is a policy, not a guarantee.
Microsoft's own shared responsibility model is clear that Microsoft keeps the service running, and the customer is responsible for their data. Native features such as the recycle bin, retention policies and post cancellation grace periods are useful. But they all sit inside the same platform, under the same provider, and are subject to the same mistakes.
If that platform deletes something by error, every copy controlled by that platform can go with it. That is why we explain the difference between Microsoft 365 backup and native retention so often: retention is not an independent copy.
The data in this story was not lost to ransomware or a careless click. It was lost during an administrative change . That is a pattern we see again and again. Data is most at risk during:
Plan downgrades or upgrades. Moving from Business Premium to Business Basic, or between Enterprise plans. Grant and discount changes. Nonprofit, education and startup programmes are revised or retired. Expired or unpaid renewals. A missed invoice can start the clock on a subscription ending. Mergers, splits and tenant moves. Data moves between tenants and old tenants are shut down. Staff leaving. Licences are removed from departing users, along with their mailboxes and OneDrive files.
| Check | Why it matters | | | | | Confirm an independent backup has a recent, complete copy | You are not relying on a grace period | | List every mailbox, OneDrive, SharePoint site and Team affected | You know exactly what is at stake | | Note the exact end date of the old subscription | Grace periods start counting from here | | Test a restore of a few sample items | You know the backup actually works | | Keep the backup running after the change | Protection continues on the new plan |
An independent backup keeps a copy of your Microsoft 365 data outside your Microsoft tenant , with separate access. If something goes wrong inside Microsoft 365, whether an error, an expired licence or a compromised admin account, your copy is unaffected.
With Loop Backup for Microsoft 365:
4 backups a day of Exchange Online, OneDrive, SharePoint and Teams. Immutable, air gapped copies that cannot be changed or deleted from your Microsoft 365 account. Unlimited retention , so you keep data for as long as you choose, not as long as a licence lasts. Point in time restore of a single email, a file, a folder or a whole mailbox. Your choice of data region , including UK data centres.
Had the affected nonprofits held an independent backup, the deletion would have been an inconvenience rather than a permanent loss. They could have restored the data into a new tenant and carried on.
1. Find out which Microsoft 365 plan you are on and when it renews or ends. 2. Check whether you hold any data that exists only in Microsoft 365. For most organisations, the answer is almost all of it. 3. Set up an independent backup before your next licence change , not after. 4. Include departing staff. Back up their mailbox and OneDrive before removing the licence. 5. Test a restore every quarter , so you know it works when you need it.
Charities have particular duties around donor, beneficiary and safeguarding records. Our backup for charities page covers those in more detail.
Can Microsoft recover data deleted in error? Not always. In this case Microsoft said its recovery attempts had failed. Native recovery depends on Microsoft's own systems, so it cannot protect you from a mistake inside those systems.
Does Microsoft 365 include backup? Microsoft 365 includes retention and recycle bin features, but not an independent backup held outside the service. See our Cloud Backup FAQ for more.
What happens to my data when a Microsoft 365 subscription ends? Microsoft normally keeps data for a limited grace period and then deletes it permanently. As this incident shows, you should not rely on that window being honoured in every case.
Is it too late if my subscription already changed? If your data is still in your tenant, no. Start a backup now so that you have an independent copy from today onwards.
Don't let a licence change decide what your organisation keeps. Start a free 14 day Loop Backup trial and have an independent, immutable copy of your Microsoft 365 data within minutes.