Others have answered the crux of your questions, which is that it's basically donations... either from the admins by providing free access to their server, or by the community through Patreon or whatever.
But to put into context how much money we're talking about...
A server to host 1k active users and 5k-10k registered users, you're talking about a 4cpu-8cpu box costing less than $20/mo. Plenty of nerds with decent jobs in wealthy countries are willing to write that off as a donation. This covers 99% of the <1k Lemmy servers in the world.
The 10 biggest Lemmy servers still only have hosting costs of $50-$300/mo. That's not nothing, but there are probably 10 wealthy nerds in the world willing to write that much off each month. And those costs can be offset through community donations. These servers support 10k-40k registered users, it doesn't take a ton of donations to cover that modest expense serving that many people.
Now, if you count admin/mod time and expertise, of course... those costs would be huge. But those people either volunteer or get a bit of money from non-profits. But the hardware costs are modest.
Say what you will about reddit, at least an established subreddit was the place to gather on the topic, ie r/technology etc.
This premise on which your question is based isn't actually true though. There's /r/technology and also /r/tech. There's /r/DnD and also /r/dndnext. As of recently, for some reason there are like 35 nearly identical amitheasshole subreddits with different names.
I feel like what you're observing is just that reddit communities are mature, people have had time to gravitate to whichever community is more active or has better quality moderation and so there is generally a "winner" sub with more participation because... unless there's a major problem with the bigger sub it tends to be more interesting than a less well-trafficked sub.
Lemmy, in contrast, is still fairly wild-west. Most communities are not very active and have only a few subscribers. If a competing community with an overlapping topic appears, folks are willing to subscribe to it just in case it takes off. If Lemmy continues to retain a healthy number of users, I expect in most cases that consolidation would set in unless there were major differences in moderation policy or something else that splits the community into factions that align across server or community boundaries... and over time you'll see a similar layout of one or two dominant communities and a long tail of tiny ones that few pay attention to.