The star has handed over the entirety of his £25,000 honor winnings to the Music Venues Trust, which operates to protect the UK's small music venues.
He was awarded the award on 16 October as his new release his work was named the outstanding release of the last 12 months.
The musician has chosen to hand the money over to the Music Venues Trust, in recognition of the vital role small stages played in his early career.
"I couldn't be pursuing my current career if it hadn't been for all the gigs I played around the North East, and beyond, when I was starting out," stated Sam Fender. "These venues are renowned, but they are in difficulty."
Since the start of 2023, more than 150 of these venues have ceased operations – about 16 percent of the total UK scene.
In the last year, well-known musicians including Pulp, Coldplay, Katy Perry and Ed Sheeran have all backed the MVT in its efforts to keep the scene afloat, by adding a modest fee to their ticket prices, which benefits smaller concert halls.
Fender also participated, collecting over £100k on his live tour to assist 38 small stages across Britain.
The money helped spaces that were dealing with possible closure due to challenges stemming from flooding, fire incidents and bereavements, as well as licensing issues, court cases and sound issues.
Some locations obtained financial assistance in improving amenities and technical equipment that positively impacted artists and audiences.
"The concept that money from shows in major spaces backs the independent spots, where it all starts for musicians like me, is just common sense," Fender has said.
The musician is not the first artist to donate his Mercury Prize prize money to good deeds.
When the band received the trophy in the year 1996 for their album Different Class, lead singer Cocker stated that the act would contribute their winnings to the organization War Child.
That year, artist she shared her award across multiple charities, such as the children's charity and a Sickle Cell organization.
"And I contributed a thousand pounds to my local community centre, to their gymnastics class, because I practiced gymnastics when I was a child and they lacked new equipment," she explained to the media.
Previously, Ezra Collective donated their winnings to the community center that developed their group, alongside other local music groups.
Also 1994 winners M People donated their prize to a charity for MS after a close contact was found to have the illness.
"Winning was quite enough," said vocalist Heather Small. "The money was the cherry on top but we could do without the cherry, because we had the main prize. So our success affected the lives of others."
Last week, the Music Venues Trust shared it had rescued a couple of grassroots venues in south-east England, by bringing them into public stewardship.
The Joiners in that area and the second in Bristol were acquired under the Own Our Venues scheme, which is funded by a national body and music fans who buy "shares" in the properties.
