On a Monday evening in mid-November, dozens of demonstrators gathered outside Toronto’s Park Hyatt Hotel, where the Giller prize gala was taking place. The following night, in London, the Baillie Gifford nonfiction prize dinner closed with this year’s winner Richard Flanagan announcing that he would be deferring receipt of the prize money in protest. And two days later, more than a hundred authors – Isabella Hammad, Andrew O’Hagan and Maaza Mengiste among them – signed an open letter condemning the “deep-rooted hypocrisy” of the JCB prize for literature.

These awards have big purses – the Giller winner gets 100,000 Canadian dollars, the Baillie Gifford £50,000, the JCB 2.5m rupees – and can be career-makers. But the past year has seen so much pushback against the corporate sponsors behind the prizes that winning these awards is no longer a straightforwardly celebratory moment for an author.

In a pre-recorded acceptance speech video, Flanagan said that he would not take the money until Baillie Gifford shared a plan to reduce its investment in fossil fuel extraction, and that he would welcome an opportunity to speak with Baillie Gifford’s board. This capped a year of protests against the fund manager: a campaign by Fossil Free Books (FFB) highlighting the company’s investments in businesses connected to fossil fuels and Israel led to its sponsorships of nine UK literary festivals coming to an end in June.

Ahead of Flanagan’s book Question 7 being announced as this year’s winner, Baillie Gifford partner Peter Singlehurst gave a lengthy defence of the company, maintaining that its investments in fossil fuels are below the industry average. But the company “cannot offer purity” and there will “always be some grey areas”, he said.

How are authors navigating this moral territory? Last year, John Vaillant won the prize with a book that somewhat ironically is about wildfires just as FFB’s campaign was kicking off. He accepted the award and the money; this year, Flanagan decided he could “not write a book such as Question 7, which in part deals with the catastrophe of climate, with the destruction and vanishing of the world I love, and not mention it”, he told the Guardian. The Australian author has already spoken with a partner at Baillie Gifford, and Singlehurst says the company looks forward to “continuing the conversation”.

“Flanagan has earned the right to do whatever he likes with his prize,” says Vaillant. “That said, arts funding is vulnerable and shrinking.” He thinks the best approach, “even when it’s imperfect and uncomfortable” is to “stay engaged, keep the pressure on and, where appropriate, show gratitude”.

“I respect the sentiments expressed by Richard Flanagan, although he could equally have done as I did, which was to give the prize money to various public interest organisations,” said Philippe Sands, who won the Baillie Gifford prize in 2016. Viet Thanh Nguyen, who was shortlisted for this year’s prize, called on Baillie Gifford to divest from the controversial investments and pledged to donate the £5,000 he received for being shortlisted to We Are Not Numbers, an organisation publishing literary work by Palestinians from Gaza.

Meanwhile Anne Michaels was criticised for her choice to accept the Giller prize, a Canadian award that has been mired in controversy for more than a year; last year’s ceremony was twice interrupted by protests against its sponsor, Scotiabank, over its investments in Israeli weapons manufacturer Elbit Systems. Michaels was further criticised for her winner’s speech, an edited version of which she posted on X. She did not mention Gaza or the protests, but said she writes “because the dead can read”. The statement is “a word salad of complicity”, wrote Samer Abdelnour, a senior lecturer at the University of Edinburgh’s business school, in an X post. “Abhorrent moral vacuity,” added Sunny Singh, who directs the Jhalak prize for books by writers of colour.

Madeleine Thien, who won the Giller prize in 2016 and recently requested that the prize remove her name, image and work from its website, says “writers survive on very little, and I don’t judge anyone”. But “for my own part, and with my own imperfections, I wish to do right by the lives and the worlds that are at the heart of my writing.”

The latest prize sponsor to come into the spotlight is British heavy equipment manufacturer JCB. An open letter published in late November condemned the prize’s “obscuring of violence” given JCB’s “major role in the horrifying destruction of homes and livelihoods across India, Kashmir and Palestine”.

Taken together, the “new wave” of protests against Scotiabank, Baillie Gifford and JCB suggest that “writers are not content for their talents and their hard work to be used to generate positive publicity for companies who are engaged in deeply harmful activities”, says Isobel Tarr, co-director of Culture Unstained, a campaign group that calls on cultural organisations to cut ties to fossil fuels.

Might these events deter future winners of prizes with controversial sponsors from accepting prizes or prize money, and could that threaten those prizes’ funding? Sands doubts that Flanagan’s approach will influence others: “these are very personal decisions”, though he “would expect” Baillie Gifford to “respect any writer’s views on these matters”, and hopes its sponsorship of the nonfiction prize will continue long into the future.

Drawing attention to the £100,000 donation made to ex-Baillie Gifford festivals by publisher Bloomsbury after an FFB organiser wrote to a member of senior management, Tarr says she sees it as “a positive thing that writers are not only challenging the status quo in the sector, but actively bringing about alternatives”.

Others are unconvinced such alternatives will be enough to sustain funding. The protests across the sector have come at the same time as a “big drop” in sponsorship and government support in “tough economic times”, says the Giller prize’s chief executive, Elana Rabinovitch. “You can break things much faster than you can build things.”