The artist has handed over the entirety of his £25k honor prize money to the MVT, which operates to save the Britain's small concert spaces.
The star was given the award on October 16 as his new release People Watching was named the outstanding release of the previous year.
Fender has chosen to hand the money over to the MVT, in recognition of the essential function local spots played in his early career.
"I couldn't be pursuing what I am doing today if it hadn't been for all the performances I performed around the area, and elsewhere, when I was just getting going," stated the artist. "These venues are legendary, but they are in difficulty."
From early 2023 onward, over 150 of these locations have permanently closed – approximately 16% of the total UK scene.
Over the past year, major artists like the band Pulp, Coldplay, the singer Katy Perry and Sheeran have all backed the Music Venues Trust in its initiatives to keep the scene afloat, by including a small levy to their ticket prices, which benefits smaller concert halls.
Sam Fender also joined in, raising more than £100,000 on his recent tour to help thirty-eight local spots across England, Scotland, and Wales.
The donation supported venues that were dealing with imminent closure due to issues arising from flooding, fire incidents and family tragedies, as well as licensing issues, court cases and sound issues.
Additional spaces received monetary aid in modernizing infrastructure and sound and lighting systems that helped performers and fans.
"The idea that revenue from concerts in large arenas supports the local stages, where it kicks off for musicians like me, is just logical," the star has commented.
The musician is not the first artist to contribute his Mercury Prize funds to charitable organizations.
Back when Pulp received the award in 1996 for their album their work, vocalist the singer stated that the group would give their prize money to the organization War Child.
That year, rapper and singer Ms Dynamite split her prize among a few charities, such as the NSPCC and a Sickle Cell organization.
"I also donated a £1,000 to my local community centre, to their classes, because I trained in gymnastics when I was growing up and they needed better apparatus," Ms Dynamite shared with outlets.
Two years ago, the band contributed their prize money to the community center that supported their band, as well as other independent music bodies.
And winners that year the group contributed their prize to a multiple sclerosis charity after a acquaintance was diagnosed the condition.
"Receiving the award was sufficient," said vocalist Small. "The money was the bonus but we didn't need the bonus, because we had the cake. So our victory affected another person's life."
Recently, the Music Venues Trust revealed it had saved two local spots in the South East, by placing them under community ownership.
The first in Southampton and The Croft in that location were purchased under the Own Our Venues program, which is backed by a national body and music fans who acquire "shares" in the venues.
