Your organization's policies don't allow you to share with these users. Go to External Sharing in the Office 365 admin center to enable it.

Hi Mark,

The External Sharing settings in the SharePoint admin center is set for tenant level.

Turning external sharing on at the tenant level means that site collections can then be enabled for sharing. However, to allow external sharing, we also need to enable it for each site collection. Please check the information below to see if you have enabled external Sharing for the site collection. Please refer to Turn external sharing on or off for SharePoint Online to check if you have enabled external sharing for the site collection level. Here’s the summary:

• If the library is the one in SharePoint classic site (SharePoint team site)

Go to the SharePoint admin center>site collections>select the site>click “Sharing” tab>set the sharing policy  

• If the library is the one in Office 365 group site (SharePoint modern team site)

You need to enable the external sharing via PowerShell command for Office 365 group site.

If you have set the settings above but still have the issue, to narrow down the issue, please provide the information below:

1. Is this a SharePoint classic site (SharePoint team site) or an Office 365 group site (SharePoint modern team site)?
2. Go to site settings>Site permissions>Access Request Settings, check if you have check the option “allow members to share the site and individual files and folders”. Then provide a screenshot.
3. If this is a SharePoint classis site, go to Office 365 Admin center>Resources>Sites>select the site, check the Sharing Status then provide a screenshot.

Thanks,

Rena