The artist has handed over the full amount of his £25,000 honor cash to the Music Venues Trust, which functions to preserve the UK's small live music spots.
Fender was awarded the prize on October 16 as his new release People Watching was chosen as the outstanding release of the past year.
The musician has opted to hand the money over to the MVT, in recognition of the vital role grassroots venues played in his early career.
"I personally would not have achieved what I am doing today if it hadn't been for all the performances I played around the North East, and further afield, when I was starting out," said the artist. "These spaces are renowned, but they are struggling."
Since the start of 2023, more than 150 of these spaces have permanently closed – approximately 16% of the entire UK sector.
In the last year, major artists like Pulp, the group Coldplay, the singer Katy Perry and Ed Sheeran have all backed the MVT in its initiatives to keep the scene afloat, by applying a minor surcharge to their ticket prices, which goes to help local stages.
Sam Fender also took part, generating more than £100,000 on his 2024 arena tour to help thirty-eight local spots across the UK.
These funds assisted venues that were dealing with imminent closure due to difficulties stemming from floods, blazes and family tragedies, as well as licensing issues, court cases and noise complaints.
Additional spaces obtained funding support in upgrading infrastructure and sound and lighting systems that directly benefitted artists and concertgoers.
"The notion that revenue from shows in big venues supports the smaller venues, where it all starts for performers like me, is just logical," the star has stated.
He is not the first artist to give his Mercury Prize funds to good deeds.
In Pulp won the award in the year 1996 for their album the album, vocalist Jarvis Cocker declared that the band would donate their winnings to the charity the charity.
During 2002, rapper and singer the artist split her prize between multiple organizations, like the NSPCC and a Sickle Cell organization.
"I also gave a grand to my local community centre, to their classes, because I trained in gymnastics when I was growing up and they needed updated gear," Ms Dynamite explained to the media.
Two years ago, they contributed their funds to the community center that nurtured their act, alongside other grassroots music organisations.
Also the 1994 recipients M People gave their prize to a charity for MS after a friend was found to have the disease.
"The victory was sufficient," remarked vocalist Heather Small. "The prize was the bonus but we could do without the extra, because we had the honor. So our success impacted the lives of others."
In the past week, the Music Venues Trust announced it had saved several small stages in that region, by bringing them into public stewardship.
The Joiners in that area and the second in the city were acquired under the public acquisition program, which is backed by the arts council and supporters who purchase "stakes" in the buildings.
