The star has handed over the entirety of his £25,000 honor winnings to the MVT, which works to protect the UK's grassroots live music spots.
He was given the prize on 16 October as his third album People Watching was named the outstanding release of the last 12 months.
Fender has decided to hand the money over to the Music Venues Trust, in recognition of the vital role small stages played in his initial steps.
"As an artist wouldn't be doing what I am doing today if it weren't for all the shows I played around the region, and further afield, when I was just getting going," said Sam Fender. "These venues are renowned, but they are facing challenges."
Since the start of 2023, more than 150 of these venues have permanently closed – approximately one-sixth of the whole industry in the UK.
In the last year, well-known musicians like Pulp, Coldplay, Katy Perry and Ed Sheeran have all aided the trust in its initiatives to support the industry, by adding a small levy to their ticket costs, which benefits smaller concert halls.
He also joined in, raising more than £100,000 on his 2024 arena tour to help 38 local spots across Britain.
These funds helped spaces that were dealing with imminent closure due to difficulties caused by floods, fire incidents and personal losses, as well as regulatory hurdles, legal disputes and sound issues.
Some locations were granted funding support in improving amenities and sound and lighting systems that positively impacted performers and audiences.
"The notion that revenue from shows in big venues helps the independent spots, where it all starts for performers like me, is just common sense," Sam Fender has commented.
He is not the first artist to donate his Mercury Prize funds to good deeds.
When they won the prize in the mid-90s for their album Different Class, frontman the singer declared that the group would contribute their cash to the charity War Child.
During 2002, musician she divided her bounty between several good causes, including the NSPCC and a charity for Sickle Cell.
"And I gave a grand to my local community centre, to their classes, because I trained in gymnastics when I was growing up and they required better apparatus," she shared with outlets.
In recent years, the band gave their funds to the local youth club that supported their group, as well as other independent music bodies.
Additionally the 1994 recipients M People donated their winnings to a multiple sclerosis charity after a friend was found to have the illness.
"Receiving the award was sufficient," stated artist the singer. "The prize was the extra but we didn't need the cherry, because we had the honor. So our success affected somebody else's life."
Last week, the MVT announced it had saved several small stages in that region, by transferring them to community ownership.
The Joiners in the city and the other in the city were acquired under the Own Our Venues initiative, which is supported by Arts Council England and supporters who purchase "ownership units" in the buildings.
