Pumpkin Pies and Public Goods: The Raffle Fundraising Strategy

Charitable organizations, such as schools and churches, oftenuse raffles to raise money. This article explores the economicincentives inherent in raffle fundraisers. Raffling off aprize is compared to simply asking for voluntary contributions(i.e., a raffle without a prize). Even if every contributor isrisk-averse, offering a prize can increase contributions to apublic good by more than the value of the prize. Thus, tyingcontributions to a raffle can increase the equilibrium supplyof a public good. Moreover, there exists a raffle prize thatmaximizes the supply of public good over other prizes.