How to Set Up Email Forwarding to Basecamp in Microsoft 365

This guide walks through setting up external email forwarding from a Microsoft 365 shared mailbox to Basecamp (or any external address)!

Overview

Microsoft 365 has two layers that control email forwarding:

1. Mailbox Forwarding Settings - Where you configure where to forward emails
2. Outbound Spam Filter Policy - Controls whether external forwarding is allowed

Both must be configured correctly, or forwarding will fail with error:

550 5.7.520 Access denied, Your organization does not allow external forwarding. AS(7555)

Step 1: Configure Mailbox Forwarding

Via Exchange Admin Center

1. Go to https://admin.exchange.microsoft.com
2. Navigate to Recipients → Mailboxes
3. Select the shared mailbox (e.g., [email protected])
4. Click Mail flow → Email forwarding
5. Enable Forward all emails sent to this mailbox
6. Enter the Basecamp forwarding address (e.g., [email protected])
7. Optionally check Keep a copy of forwarded messages
8. Save

Via PowerShell

# Connect to Exchange Online
Connect-ExchangeOnline -UserPrincipalName your-admin@domain.com -Device

# Set forwarding address
Set-Mailbox -Identity "[email protected]" `
    -ForwardingSmtpAddress "smtp:[email protected]" `
    -DeliverToMailboxAndForward $true

# Verify
Get-Mailbox -Identity "[email protected]" | Format-List ForwardingSmtpAddress,DeliverToMailboxAndForward

Step 2: Allow External Forwarding in Anti-Spam Policy

This is the step that’s often missed. By default, Microsoft 365 blocks external forwarding.

Option A: Add to Existing Policy (If You Already Have One)

If you already have an outbound spam filter rule allowing forwarding for other mailboxes:

Via PowerShell

# Connect to Exchange Online
Connect-ExchangeOnline -UserPrincipalName your-admin@domain.com -Device

# Check existing rules
Get-HostedOutboundSpamFilterRule | Format-List Name,From,State

# Add the new mailbox to an existing rule
Set-HostedOutboundSpamFilterRule -Identity "Your Rule Name" `
    -From "[email protected]","[email protected]"

# Verify
Get-HostedOutboundSpamFilterRule -Identity "Your Rule Name" | Format-List Name,From

Option B: Create New Policy and Rule

If you don’t have an existing forwarding policy:

Via Microsoft 365 Defender Portal

1. Go to https://security.microsoft.com
2. Navigate to Email & collaboration → Policies & rules → Threat policies
3. Click Anti-spam
4. Go to Outbound policies tab
5. Click Create policy → Outbound
6. Configure:
   • Name: “Allow External Forwarding”
   • Automatic forwarding: Set to On - Forwarding is enabled
7. Under Applied to, add the mailboxes that need forwarding:
   • From: [email protected]
8. Save

Via PowerShell

# Connect to Exchange Online
Connect-ExchangeOnline -UserPrincipalName your-admin@domain.com -Device

# Create new outbound spam filter policy with forwarding enabled
New-HostedOutboundSpamFilterPolicy -Name "AllowForwarding" -AutoForwardingMode On

# Create rule to apply policy to specific mailboxes
New-HostedOutboundSpamFilterRule -Name "Allow External Forwarding" `
    -HostedOutboundSpamFilterPolicy "AllowForwarding" `
    -From "[email protected]"

# Verify
Get-HostedOutboundSpamFilterRule | Format-List Name,From,HostedOutboundSpamFilterPolicy,State

Troubleshooting

Check Current Forwarding Settings

Get-Mailbox -Identity "[email protected]" | Format-List Name,ForwardingAddress,ForwardingSmtpAddress,DeliverToMailboxAndForward

Check Outbound Spam Filter Policies

# List all policies
Get-HostedOutboundSpamFilterPolicy | Format-List Name,AutoForwardingMode

# List all rules (shows which users/mailboxes each policy applies to)
Get-HostedOutboundSpamFilterRule | Format-List Name,HostedOutboundSpamFilterPolicy,From,State

Check Remote Domain Settings

Get-RemoteDomain | Format-List DomainName,AutoForwardEnabled

Quick Reference

Common Errors

Notes

• Changes typically take effect within a few minutes
• The “Default” outbound spam policy has AutoForwardingMode = Automatic which blocks external forwarding
• You must create a custom policy with AutoForwardingMode = On and apply it to mailboxes that need forwarding