The star has donated the full amount of his £25,000 honor cash to the Music Venues Trust, which works to protect the UK's small live music spots.
He was presented with the prize on October 16 as his third album his work was named the outstanding release of the last 12 months.
Fender has chosen to hand the money over to the trust, in acknowledgment of the crucial part grassroots venues played in his early career.
"I personally would not have achieved this success if it wasn't for all the performances I did around the region, and further afield, when I was just getting going," remarked Sam Fender. "These venues are renowned, but they are struggling."
From early 2023 onward, at least 150 of these spaces have permanently closed – approximately one-sixth of the total UK scene.
In the last year, well-known musicians such as Pulp, the group Coldplay, Katy Perry and Ed Sheeran have all supported the MVT in its efforts to keep the scene afloat, by including a modest fee to their ticket costs, which goes to help local stages.
He also participated, raising over £100k on his live tour to help numerous grassroots venues across Britain.
The money helped spaces that were confronting potential shutdown due to challenges caused by water damage, fires and bereavements, as well as licensing issues, court cases and noise complaints.
Other venues were granted funding support in modernizing amenities and technical equipment that helped musicians and audiences.
"The idea that money from performances in major spaces supports the smaller venues, where it kicks off for performers like me, is just sensible," the star has stated.
Fender is among several artists to contribute his Mercury Prize winnings to charitable organizations.
In the band won the trophy in the mid-90s for their release the album, vocalist Cocker stated that the group would contribute their prize money to the non-profit War Child.
In 2002, rapper and singer the artist split her prize across multiple good causes, like the NSPCC and a charity for Sickle Cell.
"I also gave a £1,000 to the center, to their gymnastics program, because I practiced gymnastics when I was younger and they needed updated gear," Ms Dynamite shared with the media.
Two years ago, the band donated their prize money to the youth organization that supported their act, in addition to other local music groups.
And winners that year the group contributed their award to a MS organization after a acquaintance was found to have the illness.
"Winning was ample," stated singer the singer. "The prize was the extra but we could do without the bonus, because we had the main prize. So our winning touched the lives of others."
Recently, the trust revealed it had saved a couple of small stages in that region, by transferring them to public stewardship.
The first in the city and The Croft in the city were acquired under the community ownership initiative, which is backed by a national body and supporters who acquire "ownership units" in the buildings.