{"id":1108,"date":"2026-05-24T17:37:08","date_gmt":"2026-05-24T17:37:08","guid":{"rendered":"https:\/\/bostonrelocationinsider.com\/?p=1108"},"modified":"2026-05-24T17:37:08","modified_gmt":"2026-05-24T17:37:08","slug":"why-are-millions-of-dollars-flowing-through-a-two-person-lexington-news-outlet-a-look-at-the-newsrooms-unorthodox-business","status":"publish","type":"post","link":"https:\/\/bostonrelocationinsider.com\/?p=1108","title":{"rendered":"Why are millions of dollars flowing through a two-person Lexington news outlet? A look at the newsroom\u2019s unorthodox business."},"content":{"rendered":"
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The Lexington Observer, like other local news startups that have sprouted in Greater Boston, has a bare-bones reporting team to cover town government, schools, and business openings: just one editor and one reporter covering a population of 34,000 people. <\/span><\/p>\n

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Its public tax filings, however, suggest a much larger operation. The news organization has handled millions of dollars in donations in recent years, something many small nonprofit newsrooms could only fantasize about.<\/span><\/p>\n

Only a small share of the Observer\u2019s 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.<\/span><\/p>\n<\/div>\n

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While the \u201cLocal News Hub\u201d program has helped the Observer pay for its own local reporting at a time when news outlets are in search of new revenue streams, some of its leaders are questioning whether it should continue. Running the program is a significant amount of work, and some of the burden falls on Lauren Feeney, the Observer\u2019s executive director, who also oversees local coverage. Plus,the goal of the Observer is to serve the community of Lexington, and several of its leaders believe its business should reflect that.<\/span><\/p>\n

\u201cThe Local News Hub is incredibly important,\u201d Feeney said. \u201cBut ideally, the Lexington Observer would be supported locally.\u201d<\/span><\/p>\n

The program works like this:Cofounder and board chair Nicco Mele, who previously served as director of Harvard University\u2019s Shorenstein Center and has served on nonprofit boards, raises money from foundations that want to support local news. Feeney, who previously worked at The Intercept and New York PBS station WNET, helps to find and vet the newsrooms that ultimately receive the funds. <\/span><\/p>\n

The outlet also serves as the \u201cfiscal sponsor\u201d for three organizations \u2014 meaning, the Observer accepts funds on behalf of the organizations, which cannot directly receive tax-free donations because they are not nonprofits. <\/span><\/p>\n

From 2023 to 2024, expenses at the Observer climbed from $640,000 to nearly $5 million a year later, the bulk of which represented funds passing through the outlet. <\/span><\/p>\n

Foundations often rely on intermediaries to help fund small and local organizations. And organizations that want to take in tax-free donations but cannot because they don\u2019t have a nonprofit status typically turn to nonprofits to be their fiscal sponsor.<\/span><\/p>\n

But the Local News Hub is, on its face, a strange offering for a hyperlocal newsroom. Consider that its peers, including Brookline.News, Cambridge Day, and The Belmont Voice, usually scrape by on donations, grants, and advertisements to fund limited staffs. Brookline.News took in $440,000 in revenue and The Belmont Voice reported $659,000 in 2024 \u2014 mostly from local benefactors. <\/span><\/p>\n

The Observer\u2019s executives said they saw a unique opportunity to help bring in cash while also supporting local news more broadly.<\/span><\/p>\n

\u201cYou see other nonprofit or local newsrooms do other weird things to make money. This just happens to be ours,\u201d Mele said. \u201cIt\u2019s an outgrowth of the unique people who live in Lexington.\u201d<\/span><\/p>\n

Mele cofounded the Lexington Observer in 2021 with the goal of reporting on Lexington at a time when the legacy newspaper, the Lexington Minuteman, was diminished.<\/span><\/p>\n

The outlet relies heavily on freelancers and volunteers, sends out a weekly newsletter, and has a small presence on Facebook, Instagram, and Bluesky. Its coverage lately has focused on public school layoffs and the anniversary of the Battle of Lexington, and Feeney said its biggest story has been covering the Lexington High School building project.<\/span><\/p>\n

As the Observer was making inroads with the local community, it saw another opportunity to support other burgeoning newsrooms \u2014 and to make money. <\/span><\/p>\n

With grant funding from the charitable arm ofMelinda French Gates\u2019s firm Pivotal, the Observer began regranting funds to other newsrooms, including The Nevada Independent, a statewide digital news outlet. <\/span><\/p>\n

Mele said he spent several years discussing how local news needed more funding support. <\/span><\/p>\n

\u201cAt some point Pivotal was interested in these topics and reached out to discuss a pilot project around funding local newsrooms,\u201d Mele said. \u201cThat\u2019s how the Local News Hub was born.\u201d <\/span><\/p>\n

In total, the Observer has taken in at least $8.8 million in grants from philanthropic groups such as the Bright Future Fund and the Santa Barbara Foundation. It then regranted the vast majority of those funds to other organizations such as the investigative newsroom Searchlight New Mexico and the Arizona Center for Investigative Reporting. The Observer has made at least $700,000 in fees from the Local News Hub since 2023, representing 61 percent of its operating income over that period.<\/span><\/p>\n

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It has also become a fiscal sponsor for the Texas magazine Stranger\u2019s Guide, Wisconsin radio network Civic Media, and Minnesota-based state newswire organization Public News Service. <\/span><\/p>\n

Kevin Davis, a lecturer at UC Santa Barbara who previously served as CEO of the Institute for Nonprofit News, said it makes sense for news organizations to be sponsored by the Observer because of the experience of Mele and Elizabeth Hansen Shapiro, an Observer board member who previously served as CEO of the National Trust for Local News.<\/span><\/p>\n

\u201cThey\u2019re bringing real knowledge to the table,\u201d Davis said.<\/span><\/p>\n

Because of its size, the Observer doesn\u2019t accept grant applications, but rather selects recipients on its own. Mele said he is not currently seeking to serve as the fiscal sponsor for any additional newsrooms. <\/span><\/p>\n

The program got large enough that Mele took a salary in 2024, though the Observer reported this as $224,000 for only five hours of work per week. <\/span><\/p>\n

After the Globe asked about the salary and the hours worked, Mele said the reported salary was inflated because it \u201cerroneously includes reimbursements from expenses.\u201d He said the hours were listed as the typical amount for board members, but didn\u2019t reflect his actual hours worked, which were closer to full time. He said the Observer was working to correct the tax filing. <\/span><\/p>\n

For comparison, the editor of Brookline.News made $105,000 and the CEO of the New Bedford Light made $130,000 in 2024, according to public tax filings.<\/span><\/p>\n

Nonprofitexperts said the work of regranting and fiscal sponsorship doesn\u2019t come without risk. <\/span><\/p>\n

From an accounting perspective, \u201cthe biggest issue is transparency,\u201d said Nancy Chun Feng, a Suffolk University professor of accounting and business law. Fiscal sponsorship, she added, is an \u201cefficient model, but requires careful governance to avoid blurred lines.\u201d<\/span><\/p>\n

Some of the details about the Local News Hub were not previously disclosed. Until the Globe asked about six- and seven-figure grants that the Observer received for the Local News Hub, they were not included on the Observer\u2019s website. That seemingly violated the Observer\u2019s own donor transparency policy, which said that it \u201cmake[s] public all revenue sources and donors who give $5,000 or more per year.\u201d <\/span><\/p>\n

Mele said that he \u201cjust never really got around to it,\u201d but has since updated the site with current donors that have given more than $5,000 to the Local News Hub, the three current organizations it fiscally sponsors, and financials that differentiate operations for the Observer and the Local News Hub.<\/span><\/p>\n

Some of the Observer\u2019s leaders want to move on from the Local News Hub, with the hope of leaning more on its neighbors. Some of the options that Mele, Feeney, and the board have discussed are merging with a local movie theater or taking over a coffee shop, taking inspiration from media-owned cafes in Marfa, Texas and Camden, Maine. <\/span><\/p>\n

\u201cThe way I think about it is just that this is a way to get some money in the door to start the Observer. It kind of took off,\u201d Mele said, adding that he has less time to oversee it now that he has another full-time job as cofounder and CEO of Warchest, a company that offers software for political campaigns. \u201cNow, we got to get back to the main work of the Observer.\u201d <\/span><\/p>\n

Others at the Observer think the outlet should expand the Local News Hub.<\/span><\/p>\n

Cameron Hickey, an Observer board member, sees an opportunity to grow the business and help encourage the type of newsroom it\u2019s building in Lexington in other communities.<\/span><\/p>\n

\u201cWhen you\u2019re creating infrastructure for others, it gives you some leverage to increase the opportunities for what you think is better for the world,\u201d said Hickey, who also serves as CEO of the National Conference on Citizenship. \u201cI don\u2019t think it is what the Observer set out to do. But I think it is an opportunity worth expanding on.\u201d<\/span><\/p>\n

Ultimately, the Observer wants its coverage and business to reflect the town. Feeney said the outlet has been holding informal backyard gatherings to hear more from the community, with a goal of turning some attendees into regular donors.<\/span><\/p>\n

One of those donors, Town Meeting Members Association leader Sarah Higginbotham, said she sees no issue with the Observer\u2019s dual lines of business.<\/span><\/p>\n

Higginbotham, however, is eager to see the outlet expand in other ways. She\u2019s enthusiastic about community spaces where she could meet other financial supporters of the paper. <\/span><\/p>\n

\u201cThe idea that democracy requires a local source of news is so important,\u201d Higginbotham said. \u201cI would love to see this as a way to bolster how we connect with each other and talk to each other.\u201d<\/span><\/p>\n

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While the \u201cLocal News Hub\u201d program has helped the Observer pay for its own local reporting, some of its leaders are questioning whether it should continue.<\/p>\n","protected":false},"author":1,"featured_media":1107,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1108","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nWhy are millions of dollars flowing through a two-person Lexington news outlet? 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