The artist has handed over the full amount of his £25k award cash to the Music Venues Trust, which works to preserve the UK's independent concert spaces.
Fender was given the cheque on October 16 as his new release People Watching was named the best record of the previous year.
He has chosen to hand the money over to the Music Venues Trust, in acknowledgment of the essential function grassroots venues fulfilled in his early career.
"I wouldn't be doing what I am doing today if it wasn't for all the shows I performed around the area, and elsewhere, when I was starting out," said the artist. "These locations are iconic, but they are in difficulty."
Beginning in 2023, more than 150 of these spaces have permanently closed – approximately 16% of the entire UK sector.
Recently, major artists like Pulp, Coldplay, Katy Perry and Ed Sheeran have all backed the MVT in its attempts to keep the scene afloat, by adding a small levy to their ticket costs, which goes to help smaller concert halls.
Sam Fender also joined in, generating more than £100,000 on his recent tour to assist 38 small stages across Britain.
The money assisted locations that were facing imminent closure due to difficulties caused by flooding, fires and family tragedies, as well as licensing issues, legal disputes and neighbor objections.
Other venues received monetary aid in improving amenities and gear that positively impacted musicians and audiences.
"The concept that revenue from performances in large arenas helps the independent spots, where it begins for performers like me, is just sensible," Fender has said.
Fender is far from the only musician to contribute his Mercury Prize funds to worthy causes.
In they received the award in 1996 for their record the album, lead singer Jarvis Cocker announced that the act would contribute their winnings to the charity War Child.
During 2002, rapper and singer she divided her prize across several good causes, like the NSPCC and a charity for Sickle Cell.
"And I gave a £1,000 to my local community centre, to their gymnastics class, because I trained in gymnastics when I was younger and they required better apparatus," Ms Dynamite explained to a publication.
Previously, the band contributed their prize money to the local youth club that nurtured their act, alongside other independent music bodies.
And the 1994 recipients M People donated their prize to a multiple sclerosis charity after a close contact was identified with the condition.
"The victory was ample," said vocalist Small. "The cash was the extra but we didn't require the bonus, because we had the main prize. So our winning impacted another person's life."
Recently, the MVT shared it had saved a couple of local spots in south-east England, by transferring them to local control.
The first in that area and The Croft in Bristol were acquired under the Own Our Venues scheme, which is funded by Arts Council England and enthusiasts who purchase "shares" in the venues.
