The artist has given the complete sum of his twenty-five thousand pound honor cash to the Music Venues Trust, which functions to protect the UK's grassroots live music spots.
Fender was presented with the prize on mid-October as his third album his work was named the top album of the past year.
He has chosen to hand the money over to the MVT, in acknowledgment of the crucial part grassroots venues played in his initial steps.
"As an artist would not have achieved what I am doing today if it hadn't been for all the gigs I played around the region, and elsewhere, when I was just getting going," said the artist. "These spaces are legendary, but they are struggling."
From early 2023 onward, more than 150 of these locations have permanently closed – about 16 percent of the entire UK sector.
Recently, top acts like Pulp, Coldplay, Katy Perry and Ed Sheeran have all supported the Music Venues Trust in its attempts to keep the scene afloat, by adding a modest fee to their admission fees, which benefits local stages.
Sam Fender also joined in, collecting in excess of £100,000 on his live tour to assist 38 small stages across the UK.
These funds supported venues that were dealing with imminent closure due to difficulties caused by floods, fire incidents and personal losses, as well as regulatory hurdles, court cases and sound issues.
Some locations were granted financial assistance in upgrading amenities and technical equipment that helped artists and concertgoers.
"The notion that revenue from shows in large arenas helps the smaller venues, where it kicks off for performers like me, is just common sense," the star has said.
Fender is not the first artist to contribute his Mercury Prize funds to charitable organizations.
In the band won the award in 1996 for their album Different Class, frontman the singer stated that the band would donate their prize money to the organization War Child.
During 2002, artist Ms Dynamite shared her bounty among a few organizations, like the children's charity and a charity for Sickle Cell.
"Additionally, I contributed a grand to the center, to their gymnastics class, because I trained in gymnastics when I was growing up and they needed updated gear," she told a publication.
Two years ago, the band contributed their funds to the youth organization that supported their group, in addition to other local music groups.
Additionally winners that year M People gave their winnings to a multiple sclerosis charity after a close contact was found to have the condition.
"Winning was ample," remarked singer the singer. "The prize was the bonus but we could do without the cherry, because we had the honor. So our winning impacted the lives of others."
Last week, the trust shared it had saved several grassroots venues in south-east England, by transferring them to community ownership.
The Joiners in Southampton and the other in that location were bought under the Own Our Venues scheme, which is backed by the arts council and music fans who acquire "ownership units" in the buildings.
