Maybe you should just whip out a pair of socks with self-patterning yarn. They're much less work than they look like, and non-knitters (which will be the bulk of your audience) love them. I was at a 4-H function once, working on a complicated bit of Celtic-style cabling, and another mom approached me and said, "Oh, you're knitting! That looks, um, really nice! But my mom knits and she is AMAZING!" [other kid's mom pulls up jeans leg to show sock that looks JUST like the swatch hanging in front of the self-patterning Kroy yarn at Joann] "Can you believe she MADE these?"
Real colorwork is impressive too... snowflake mittens? dichroic's semi-Swedish hat? (Paula's design at Ravelry, in case you don't follow her there.)
Or people are impressed by lace things too. A shawl? Probably not by February or whenever Mardi Gras is, I guess.
For my private school auction I did a sweater,, BUT... the item description had a Penny Straker pattern and a small amount of the yarn from my stash that I was willing to use. It was very clear it was not a random sweater of the winner's choosing, but rather a particular sweater in a particular yarn, knit to the winner's measurments.
That might be more than you want to do for a raffle. If you are looking for finished product, I'd say a small, lacy scarf.
People go ga-ga for baby sized items, you would grab a grandma-to-be's attention with some cute little baby set.
A shawl. A hat/scarf set that is particularly special in some way (not something you could just go buy kwim?) uhm.
I once (10 years ago) knit a Harry potter sweater: red, with a gold intarsia griffon on the front-- the pattern was on the web but was taken off because of copyright (I expect any griffon would do). It was at the height of HP fervor, but it sold for a lot. Comparatively. And although intarsia makes me tired, it was easy enough.
I'm sure you'll probably be sick of knitting baby things, but I think that might be popular too. Lots of people know someone who is having or just had a baby and a sweater and booties makes a nice gift. A penny sale I went to a couple of years ago had quite a few baby things that seemed to be popular. I think mittens would go over well too and fit isn't as much of an issue as it is with some other items.
Afghan. Big blankets impress people. Use nice acrylic (oxymoron, I know, but non-knitters think yarn is inexpensive, and there's some really smooshy stuff out there - James Brett Marble Chunky comes to mind)
My experience is that hand-knit items, especially for raffle/silent auction, etc. are vastly under-appreciated and under-bid. :(
I would keep yarn cost and time spent to a minimum - I would likely knit a pair of mittens or possibly a mitten/scarf set. Fit doesn't have to be exact, so you have more leeway. Baby things are also a quick knit, and people are usually more willing to pay for baby stuff as you can give it away as a shower gift.
I'll be looking forward to a post of the item you knit for this!