I've never ran a contest on any of my communities before. I've thought about it in the past, but it just never happened. If I ever did get around to having a contest, the prizes would be most likely steam codes. I was going to host a challenge contest on VG Challenges when it was still around. (It technically is still around as Thee Zone.)
Running forum contest is among the easiest ways to boosting activities on your community. If there are decent prizes to be won at the end of the contest, it's going to bring decent activities for you.
I have a few times ran contests on my forums, not always for a money offer but sometimes for other prizes online such as VIP for a month on my forum for winning a contest.
Contests are great to help not only give back to the community but also help with engagement.
Contests can be done once in a while to boost the activities of the forum. But it should not be the main reason why members engage, especially if it has monetary incentives. It could do more harm than good.
I did when I was a forum owner. I found it did help with activity and post/thread count and members tend to really enjoy contests if you make the prize something worthwhile. I will say though that you have to be strategic with your contests and make sure they are beneficial to your forum and not harming it. For example, you don't just want to have a contest to see who can create the most threads because then you'll have a lot of useless threads that have a few words and don't really encourage replies or feedback. If you're going to do something like that maybe, make it a contest to see who can create the most engaging threads. Even when you make a contest with who can create the most threads with at least x number of words I find some people create threads and just babble on or fill the thread with words but it isn't as engaging or valuable.
Back when I held contests, I found it to be very helpful to the community and helped a lot with the stats of the forum.