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MS-900 Practice Question: A charitable organization with 50 employees wants…
A charitable organization with 50 employees wants to use Microsoft 365 for email and collaboration but has a very limited budget. What should they do first to obtain licenses at a reduced cost?
⚠ Common exam trap
MS-900 often tests the sequence of steps for nonprofit licensing, tricking candidates into picking a specific license SKU when the question is really asking about the prerequisite eligibility application.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Apply for Microsoft 365 Nonprofit eligibility
Microsoft offers substantial nonprofit discounts (often free or heavily reduced Microsoft 365 Business Basic/E3 grants) to eligible charitable organizations through the Microsoft Nonprofit program. Before purchasing any licenses, the organization must first apply and be validated as an eligible nonprofit via Microsoft's partner (typically TechSoup). Only after eligibility is confirmed can they obtain the reduced-cost or donated licenses.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Purchase Microsoft 365 Business Basic licenses
Why it's wrong here
Purchasing Microsoft 365 Business Basic licenses is incorrect because this subscription plan is offered at standard commercial rates without the nonprofit pricing that Microsoft provides to verified charitable organizations. Even though Business Basic includes Exchange Online, SharePoint, and Teams, the organization would incur unnecessary per-user costs, and it cannot receive the donation or discount until it first satisfies eligibility requirements through the nonprofit program.
- ✓
Apply for Microsoft 365 Nonprofit eligibility
Why this is correct
Applying for Microsoft 365 Nonprofit eligibility is the correct first action because Microsoft requires charitable organizations to undergo a verification process before granting donated or highly discounted plans. A 50-employee nonprofit can then qualify for offers such as a free Business Basic license per user or substantial discounts on enterprise products, ultimately meeting their business productivity and email needs at minimal expense.
- ✗
Use the free web versions of Office apps
Why it's wrong here
Using the free web versions of Office applications is not a sufficient solution because these browser-based tools offer only basic document creation and editing, without Exchange Online for professional email at a custom domain, SharePoint for organizational file storage, or Microsoft Teams for persistent collaboration. For a 50-employee charity, these free apps also lack the administrative, security, and compliance controls required to manage business data effectively across the organization.
- ✗
Purchase Microsoft 365 E3 licenses
Why it's wrong here
Purchasing Microsoft 365 E3 licenses is not the right choice because E3 is an enterprise-grade plan with advanced security, compliance, and analytics features that far exceed the needs of a 50-person nonprofit, and its per-user list price is substantially higher than plans like Business Basic or Business Standard. Even if the organization eventually qualified for nonprofit discounts, the E3 licensing model would still be an unnecessarily expensive option compared with the donated or discounted plans available under the Microsoft Nonprofit program.
Go deeper
Related to this question
Learn chapter
OneDrive for Business
Key term
Microsoft 365
Microsoft 365 is a subscription-based cloud service from Microsoft that combines productivity tools like Office apps with security, device management, and online storage.
Key term
Collaboration
Collaboration in Microsoft 365 refers to the integrated tools and services that enable people to work together in real time, share information, and coordinate tasks from anywhere.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
This MS-900 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MS-900 exam.