The Boston Globe has just published a fascinating story (sub. req.) about The Lexington Observer, a hyperlocal digital nonprofit through which flows a surprising amount of money. Media reporter Aidan Ryan writes that the Observer isn’t just covering its affluent community of 34,000. It also serves as a conduit for other news operations across the country.
As Ryan puts it: “The news organization has handled millions of dollars in donations in recent years, something many small nonprofit newsrooms could only fantasize about. Only a small share of the Observer’s operational revenue comes from local donors and ads. The outlet instead survives largely on fees it collects by helping other news organizations across the country raise money.”
Between 2023 and 2024, the Observer reported in tax filings that its expenses rose from $640,000 to nearly $5 million — most of which ended up in the hands of other local news outlets.
“You see other nonprofit or local newsrooms do other weird things to make money. This just happens to be ours,” Co-founder and board chair Nicco Mele is quoted as saying. Mele is a former executive director of the Shorenstein Center on Media, Politics and Public Policy at Harvard’s Kennedy School.
Also involved in the Observer’s fundraising effort, known as the Local News Hub, is Lauren Feeney, a journalist who is executive editor of both the Observer and the Hub, and Elizabeth Hansen Shapiro, an Observer board member who’s the co-founder and former chief executive of the National Trust for Local News.
The Lexington Observer — like a number of startups in Greater Boston — was launched in 2021 in response to the Gannett chain’s hollowing out of the town’s longtime weekly newspaper. In this case it was the Lexington Minuteman, whose history I wrote about here.
The Trust is a nonprofit that owns and operates newspapers in Maine (including the Portland Press Herald), Colorado and Georgia. Ellen Clegg and I interviewed Hansen Shapiro for our book, “What Works in Community News,” and our podcast.
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I’m reminded of that line spoken by the Deborah Kerr character Terry McKay in “An Affair to Remember,” ”… I have no head for business. It’s beyond me how the more money a corporation loses, the more it makes, because of the carry-overs with the write-offs. The big secret seems to be to merge a sick corporation with a big, fat healthy one, and then everybody gets well.”