This fundraising idea works along similar lines to the What's in the Box Auction and the White Elephant Sale, but there are a couple of important differences.
First of all, a grab bag fundraiser isn't an auction-style event. A flat fee per item is charged instead. In addition, supporters can't see what they're buying. To get started have volunteers donate inexpensive items — anything from used books to gag items — and spend a small amount of money at a dollar store to increase the number of items on offer.
Put each item inside a paper bag and seal them all up, making sure that the contents aren't visible. Event guests aren't allowed to feel the bags or shake them to try and determine what's inside.
Make a decision about — a handful of dollars is usually appropriate. Supporters can then pay the designated fee and pick out a bag of their choice. They won't know whether they're getting something useful (like a great cookbook) or a silly item (like a rubber ducky) but that's all part of the fun and the fundraising experience.
You'll find that most people at the event can be persuaded to buy more than one bag to try to get to the good stuff — make sure there are plenty of worthwhile prizes as well as silly ones.