A crowdfunding campaign to establish a literary prize for emerging Indigenous writers has raised more than three times its goal, a movement that has grown out of a painful controversy involving cultural appropriation.

When she heard on Wednesday that the Indiegogo calculator for the campaign had clicked past $30,000, writer Alicia Elliott became emotional.

"It's just amazing," she said. "There are not enough good adjectives for me to use."

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You will not hear Ms. Elliott, who is Tuscarora from Six Nations, fall short of adjectives very often. She is a writer and one of the central voices in the recent controversy that has roared through Canadian literature, journalism and Indigenous circles. "I feel very humbled and grateful and encouraged," she said.

The proposed prize is a reaction to a nasty chapter in CanLit. It was not the idea of an author or an Indigenous person, but Toronto lawyer Robin Parker, who was dismayed by a glib editorial in Write magazine that called for a cultural appropriation prize – in an edition dedicated to the writing of Indigenous authors. Ms. Parker said she was also upset by a subsequent Twitter exchange in which some journalists joked about establishing such a prize.

"The tone deafness of that is astonishing," Ms. Parker said. "And then for the other sort of literatis of the Canadian media to take that up the way they did and think it would be funny … just seemed so disrespectful in every possible way."

"And I just thought okay: The answer to the idea of scarcity is always richness."

On Monday – her 50th birthday – Ms. Parker launched the crowdfunding campaign for a Canadian literary award to support the vision of emerging Indigenous writers. By the time she pulled up in a cab to her birthday party on Wednesday evening, 530 backers had contributed nearly $34,000.

"Imagine being a young writer sitting down at your desk … knowing that 500 people want to hear what you have to say," Ms. Parker said.

Donors include authors, journalists and artists – Indigenous and non-Indigenous – including Polaris Prize-winning musician Tanya Tagaq, Scotiabank Giller Prize-winning novelist Sean Michaels and Griffin Prize-winning poet Christian Bok. Canadian publishing veteran Ken Whyte – whose tweet last week began the social media exchange – also contributed.

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"I support all writers, including ones who disagree with me," Mr. Whyte said.

The recent controversy began with the spring issue of Write, published by The Writer's Union of Canada, which was prefaced with a commentary by editor Hal Niedzviecki titled Winning the Appropriation Prize. Contributors to the issue, such as Ms. Elliott, found the piece shocking and offensive.

Ms. Elliott took to Twitter to express her anger not just at the content of the editorial but at the fact the writers were unaware their stories would be linked with such a piece.

Mr. Niedzviecki resigned last week, and TWUC issued an apology. But then came the late-night Twitter exchange last Thursday.

There has been employment fallout: Steve Ladurantaye – who unconditionally apologized for participating – was reassigned on Wednesday from his position as managing editor of CBC's The National; and Jonathan Kay resigned as editor-in-chief of The Walrus (although he has cited other issues for his decision).

Ms. Parker's crowdfunding campaign was launched on Monday with a $1,000 anonymous donation, but picked up steam overnight Tuesday into Wednesday, more than tripling the initial $10,000 goal.

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"After the dumpster fire of the past week in Canadian literature and Canadian media, I think it's really great and positive to see so many people rush to back something like this," says contributor Nikki Reimer, who resigned from Write magazine's advisory board over Mr. Niedzviecki's editorial.

TIFF programmer and CBC film and pop culture critic Jesse Wente, who was near tears discussing the issue on the radio this week, pledged $500. That's the amount Mr. Whyte tweeted he would give to found an appropriation prize (and which Mr. Whyte later pledged to Ms. Parker's prize).

"I made my donation public because the journalists that decided to crowdfund themselves a different sort of prize last week made themselves public, and I wanted to send a message back to my community," said Mr. Wente, who is Indigenous.

Ms. Tagaq, an Inuit throat singer, told The Globe and Mail it was a "total pleasure" to back the initiative. "Indigenous voices deserve a voice in the hyper whitewashed world of CanLit and Canadian media," she wrote in an e-mail. "The concept of the Appropriation prize shone a spotlight on the perceived impunity of white journalists. The smugness smells like the grand rot of Canadian racism. Some can afford perfumed handkerchiefs, but eventually the decomposition must be acknowledged."

Many members of the CanLit establishment, including Heather O'Neill, Camilla Gibb and Michael Redhill, were among the backers.

"I think that the call for this prize exposed such an absence and such a need and underlined the way that the greater Canadian literary community and the settler majority, power-holders in Canada, have let down and ignored this community and not given it its proper respect or support," said Mr. Michaels, who won the 2014 Giller Prize for Us Conductors.

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"I'm acutely aware that awards are divisive and art should not be competitive and artists should not be pitted against one another, but on the other hand I recognize the way that one award was very transformative for my career and for my livelihood."

Ms. Parker will give the money to an Indigenous organization to administer the prize – possibly to be announced on Thursday – but instead of it being a one-time grant, as she initially envisioned, it might grow into an endowment.

"Reconciliation means action. And enough apologizing, enough talking. Here's something really simple that people can do," she said. "If every lawyer in downtown Toronto gave what they spent on their lunch today to this award, we'd be at $100,000 right now. That's what I'd like to see happen. Those people wouldn't even miss that 20 bucks."

With a report from Simon Houpt