The star has given the entirety of his £25,000 award cash to the Music Venues Trust, which operates to save the Britain's small music venues.
He was given the award on October 16 as his new release People Watching was chosen as the top album of the previous year.
The musician has decided to give the cash to the trust, in appreciation of the vital role grassroots venues played in his initial steps.
"I couldn't be pursuing what I am doing today if it hadn't been for all the shows I did around the area, and elsewhere, when I was beginning," stated Sam Fender. "These locations are iconic, but they are facing challenges."
Since the start of 2023, at least 150 of these venues have ceased operations – roughly one-sixth of the whole industry in the UK.
In the last year, major artists including the band Pulp, the group Coldplay, Katy Perry and Ed Sheeran have all backed the trust in its initiatives to support the industry, by applying a minor surcharge to their ticket prices, which supports independent venues.
Sam Fender also took part, raising more than £100,000 on his live tour to assist thirty-eight local spots across the UK.
These funds assisted venues that were facing imminent closure due to difficulties stemming from flooding, fire incidents and personal losses, as well as permit problems, legal disputes and noise complaints.
Other venues received monetary aid in upgrading amenities and gear that positively impacted performers and concertgoers.
"The concept that funds from concerts in large arenas backs the independent spots, where it all starts for artists like me, is just sensible," Fender has said.
The musician is among several artists to donate his Mercury Prize prize money to good deeds.
In the band won the award in 1996 for their record the album, lead singer Jarvis Cocker stated that the act would give their cash to the organization War Child.
During 2002, artist she split her award between a few charities, including the NSPCC and a Sickle Cell organization.
"And I contributed a thousand pounds to Highgate Newtown, to their classes, because I practiced gymnastics when I was a child and they needed better apparatus," she told outlets.
Previously, Ezra Collective donated their funds to the local youth club that developed their act, alongside other grassroots music organisations.
Additionally winners that year M People gave their winnings to a multiple sclerosis charity after a friend was found to have the illness.
"Receiving the award was ample," stated artist Small. "The prize was the extra but we didn't require the bonus, because we had the main prize. So our success touched another person's life."
In the past week, the Music Venues Trust announced it had rescued two grassroots venues in the South East, by bringing them into local control.
One venue in Southampton and the other in Bristol were bought under the community ownership initiative, which is supported by Arts Council England and music fans who acquire "shares" in the properties.
