PixelJam is major component of the Notacon arts and technology conference. Notacon is owned an operated by FTS Conventures, a small company created solely to run these events.
As such, any and all prize money comes from the entry fees paid by participants as well as by any sponsors of the event.
If you are interested in becoming a sponsor, please inquire. Your contributions can either be earmarked for prizes in specific categories or can be directed toward offsetting the costs of running the event.