Coral reefs are at particular risk of overexploitation and extinction due to negative externalities from productive sectors such as tourism and fisheries. Increased reliance on tourism revenue means difficult trade-offs. This study proposes a community-based approach to conservation based on a bioeconomic model. We extend earlier work on exogenous reward-based conservation programs by specifying rewards contingent on the level of conservation effort. In addressing the question—whether effort-dependent revenue-sharing incentivizes local residents to engage in conservation activities—the findings indicate that what matters is the relative size of reward, the degree of reliance on coral reefs as a source of revenue, and how the stock is perceived by economic agents, that is, whether they view coral reefs as a commodity or a nuisance.