Pumpkin pies and public goods: The raffle fundraising strategy

Charitable organizations, such as schools and churches, often use raffles to raise money. This article explores the economic incentives inherent in raffle fundraisers. Raffling off a prize is compared to simply asking for voluntary contributions (i.e., a raffle without a prize). Even if every contributor is risk-averse, offering a prize can increase contributions to a public good by more than the value of the prize. Thus, tying contributions to a raffle can increase the equilibrium supply of a public good. Moreover, there exists a raffle prize that maximizes the supply of public good over other prizes.