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MS-900 Practice Question: A nonprofit organization with 50 users needs to…
A nonprofit organization with 50 users needs to use Microsoft 365 for email, file storage, and online versions of Office apps. They have a very limited budget. Which Microsoft 365 plan should they consider first?
⚠ Common exam trap
The trap here is that candidates may overlook the nonprofit-specific plans and choose a commercial plan like Business Basic (Option A) or Business Premium (Option B), assuming they are the only options, without realizing that Microsoft offers free or heavily discounted plans for eligible nonprofits, which directly address the budget constraint.
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
✓
Microsoft 365 Nonprofit Business Basic
Microsoft 365 Nonprofit Business Basic (Option D) is the correct choice because it provides email (Exchange Online), file storage (OneDrive and SharePoint), and online versions of Office apps (Word, Excel, etc.) at no cost for eligible nonprofit organizations with up to 300 users. This plan is specifically designed for nonprofits with limited budgets, offering the required functionality without the expense of paid plans.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Microsoft 365 Business Basic
Why it's wrong here
Microsoft 365 Business Basic is a commercial plan not eligible for the nonprofit discount, so a nonprofit would pay the full per-user price. Although it offers the same core services—Exchange Online email, Teams, SharePoint, and web versions of Office—it does not qualify for the donated or heavily discounted licensing under the Microsoft Nonprofit Program. Choosing this plan for a budget-constrained nonprofit would unnecessarily increase costs.
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Microsoft 365 Business Premium
Why it's wrong here
Microsoft 365 Business Premium is a premium commercial plan that bundles advanced security and compliance features such as Microsoft Defender for Office 365, Intune, and identity protection. However, it is not part of the nonprofit SKU lineup and is priced at a significant premium per user, making it economically unsuitable for a small nonprofit that only needs basic communication and collaboration tools. The extra license costs could outweigh the security benefits for a 50-user organization.
- ✗
Office 365 E3
Why it's wrong here
Office 365 E3 is an enterprise-grade plan designed for large organizations requiring advanced compliance, eDiscovery, and legal hold capabilities, typically with minimum seat counts and higher annual pricing. It is not a nonprofit-specific plan, so the nonprofit discount does not apply, and its extensive feature set goes far beyond the basic needs of a 50-user nonprofit. Adopting E3 would introduce unnecessary administrative complexity and cost without addressing the organization's actual requirements.
- ✓
Microsoft 365 Nonprofit Business Basic
Why this is correct
Microsoft 365 Nonprofit Business Basic is the correct choice because it is tailor-made for eligible nonprofits, offering Exchange Online, Teams, SharePoint, and web versions of Word, Excel, PowerPoint, and OneDrive at no cost or at a very low monthly rate depending on qualification. This plan satisfies the essential needs of email, file storage, and web-based Office apps for up to 300 users, making it economically ideal for a 50-person nonprofit. It also includes the same security and compliance baselines as the commercial Business Basic but at a nonprofit-aggregated price.
Go deeper
Related to this question
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Benefits of Microsoft Cloud
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
Exchange Online
Exchange Online is Microsoft's cloud-based email, calendar, and contact hosting service that is part of the Microsoft 365 suite, allowing organizations to manage corporate messaging without maintaining their own mail servers.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.