If the first target would be dealt combat damage by multiple creatures, you choose which of that damage to prevent. (For example, if one of those creatures has deathtouch, you could choose to prevent the damage from that creature specifically.) You don't decide until the point at which the creatures would deal their damage.
The damage will be dealt by Acolyte's Reward as it existed on the stack, not as it exists when the damage is dealt. That is, it's an instant spell that's dealing the damage, in case an ability cares about that (such as Satyr Firedancer's, which includes the phrase "Whenever an instant or sorcery spell you control deals damage to an opponent").
If the amount of damage that would be dealt to the first target is in excess of the amount of damage that Acolyte's Reward would prevent, the source deals its excess damage to the first target at the same time that the rest of it is prevented. Then Acolyte's Reward deals its damage.
Magic: The Gathering · ™ & © Wizards of the Coast · Illus. Slawomir Maniak
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You don't choose a source of damage. The prevention shield will apply to the next X damage that would be dealt to the first target, no matter where that damage comes from. It also doesn't matter whether the damage is dealt at the same time. For example, if the shield prevents the next 5 damage to the first target, and that creature would be dealt 3 damage by Lightning Strike, that 3 damage is prevented and Acolyte's Reward deals 3 damage to the second target. The prevention effect will still apply to the next 2 damage the first target would be dealt that turn.
The effect of Acolyte's Reward isn't a redirection effect. If it prevents damage, Acolyte's Reward (not the source of that damage) deals damage to the second target as part of that prevention effect. Acolyte's Reward is the source of the new damage, so the characteristics of the original source (such as its color or whether it had lifelink) don't apply. The new damage isn't combat damage, even if the prevented damage was.
After Acolyte's Reward resolves, it no longer matters whether either target is still legal. For example, if the second target is a creature controlled by an opponent, and it gains hexproof after Acolyte's Reward resolves but before it prevents damage, Acolyte's Reward will still deal damage to that creature. If Acolyte's Reward can't deal damage to the second target (perhaps because it's a creature that has left the battlefield), Acolyte's Reward will still prevent damage; it just won't deal any damage itself.
Acolyte's Reward has two targets: the creature that would be dealt damage and the permanent or player that Acolyte's Reward will deal damage to. These targets are chosen as you cast Acolyte's Reward.
The amount of damage the prevention shield will prevent is based on your devotion to white as Acolyte's Reward resolves. That amount won't change later in the turn, even if your devotion to white does.
If Acolyte's Reward prevents damage, it deals its damage immediately afterward as part of that same prevention effect. This happens before state-based actions are performed, and before any player can cast spells or activate abilities. If the source of the original damage was a spell or ability, this happens before that spell or ability resumes its resolution.
As Acolyte's Reward tries to resolve, if only the first target is illegal, Acolyte's Reward won't prevent any damage that would be dealt to that creature and, because of this, Acolyte's Reward won't deal damage to the second target. If only the second target is illegal, damage that would be dealt to the first target will be prevented, but Acolyte's Reward won't deal damage. If both targets are illegal, Acolyte's Reward won't resolve.
Mana symbols in the text boxes of permanents you control don't count toward your devotion to any color.
If an activated ability or triggered ability has an effect that depends on your devotion to a color, you count the number of mana symbols of that color among the mana costs of permanents you control as the ability resolves. The permanent with that ability will be counted if it's still on the battlefield at that time.
Hybrid mana symbols, monocolored hybrid mana symbols, and Phyrexian mana symbols do count toward your devotion to their color(s).
Numeric mana symbols ({0}, {1}, and so on) in mana costs of permanents you control don't count toward your devotion to any color.
