Hello! I'm from Manitoba, where this practice originated. This is called a social. I suppose it is kind of like a fundraiser for a wedding, but it's also a local tradition. Everybody has a social in advance of their wedding. This has been going on for generations. It's expected that if someone comes to your social, you go to theirs. Tickets are usually $10 and drinks are cheap - as low as they can legally be in the province. The people hosting the social provide a "late lunch" which usually happens around midnight, and consists of rye bread, cold cuts, garlic dill pickles, and mustard. There is also music and dancing - usually early in the night the DJ will play old-timey dancing music like polkas, then later on (once the "old people" leave) the top 40 starts. The ticket cost usually covers the host's costs (venue rental, late lunch, etc). There's usually a prize draw (aka a silent auction, though it's not really an auction at all) and that's where the money is typically made.
When I think of the amount of money I made at my wedding social compared to the amount of money I've spent attending other people's socials, I'd say it's a wash. However, it was nice to have some cash available to pay for my wedding. I think of it more like a distribution of wealth: you get it when you need it, with the expectation that you will re-distribute it later on when you are better off.