Well, some people truly aren't familiar or comfortable with basic Microsoft office applications. (read: Older folk)
We have a new admin who is smart as a whip and sharp and has a degree from a top college... from years ago. She raised her children and reentered the workforce.
She couldn't do anything on Word and has to be walked through every new software by an entry-level staffer. She is catching on, however. It has just been a time-suck for other people to educate her, as the supervisors do not want to spend money on classes.
Older folk can (and should) learn to use Microsoft Office just like everyone else. Someone without these skills should be in an entry level position, not in the mid-level position OP describes.
OP's post indicates that the employee has a master's from a top tier school and a few years of work experience. Unless that master's was obtained and/or the work experience was before 1990 or so, I would expect the employee to know these basic skills.
And especially at a non-profit where resources are tight, all employees need to be adept at doing a variety of tasks because there is just not enough money to hire assistants for these sorts of tasks.