The artist has given the complete sum of his £25,000 award cash to the MVT, which operates to protect the United Kingdom's small concert spaces.
He was presented with the cheque on 16 October as his third album his work was chosen as the top album of the last 12 months.
He has opted to give the cash to the Music Venues Trust, in recognition of the essential function local spots played in his early career.
"I wouldn't be doing what I am doing today if it hadn't been for all the gigs I did around the region, and beyond, when I was starting out," said Fender. "These venues are renowned, but they are in difficulty."
Beginning in 2023, over 150 of these spaces have shut down – about one-sixth of the total UK scene.
In the last year, top acts like Pulp, the group Coldplay, Katy Perry and Sheeran have all aided the Music Venues Trust in its attempts to help venues survive, by adding a small levy to their ticket prices, which goes to help smaller concert halls.
Sam Fender also joined in, generating more than £100,000 on his recent tour to support thirty-eight grassroots venues across the UK.
The donation assisted locations that were facing possible closure due to issues stemming from floods, blazes and personal losses, as well as permit problems, legal disputes and noise complaints.
Additional spaces received funding support in improving amenities and gear that helped artists and concertgoers.
"The concept that revenue from concerts in major spaces helps the local stages, where it all starts for musicians like me, is just logical," the star has stated.
Fender is among several artists to contribute his Mercury Prize funds to good deeds.
Back when they earned the award in 1996 for their record their work, vocalist Cocker stated that the band would donate their winnings to the non-profit War Child.
In 2002, musician Ms Dynamite shared her award across a few organizations, including the children's charity and a Sickle Cell charity.
"I also donated a £1,000 to Highgate Newtown, to their gymnastics class, because I trained in gymnastics when I was a child and they needed new equipment," Ms Dynamite explained to a publication.
Two years ago, they donated their prize money to the community center that nurtured their act, as well as other independent music bodies.
And winners that year M People contributed their prize to a multiple sclerosis charity after a close contact was diagnosed the disease.
"Receiving the award was ample," stated vocalist Small. "The prize was the bonus but we didn't require the cherry, because we had the cake. So our success affected the lives of others."
In the past week, the trust announced it had saved a couple of local spots in south-east England, by transferring them to community ownership.
One venue in the city and The Croft in that location were purchased under the community ownership scheme, which is supported by a national body and enthusiasts who buy "ownership units" in the buildings.
