The artist has handed over the complete sum of his £25k award cash to the Music Venues Trust, which functions to preserve the UK's independent concert spaces.
He was awarded the prize on 16 October as his latest record his work was named the outstanding release of the previous year.
He has decided to hand the money over to the trust, in recognition of the essential function small stages fulfilled in his early career.
"I wouldn't be doing what I am doing today if it weren't for all the shows I played around the area, and elsewhere, when I was just getting going," stated the artist. "These venues are renowned, but they are struggling."
Since the start of 2023, over 150 of these spaces have shut down – approximately 16% of the whole industry in the UK.
Over the past year, top acts like Pulp, Coldplay, Katy Perry and Sheeran have all backed the trust in its efforts to support the industry, by applying a small levy to their ticket costs, which benefits local stages.
He also took part, raising in excess of £100,000 on his 2024 arena tour to help 38 small stages across the UK.
The donation assisted spaces that were confronting potential shutdown due to challenges caused by flooding, fires and personal losses, as well as permit problems, court cases and sound issues.
Some locations were granted monetary aid in modernizing facilities and sound and lighting systems that helped performers and audiences.
"The concept that funds from performances in large arenas helps the local stages, where it kicks off for artists like me, is just common sense," Sam Fender has commented.
The musician is far from the only musician to give his Mercury Prize funds to charitable organizations.
In the band received the prize in the year 1996 for their release Different Class, lead singer Cocker stated that the band would give their cash to the organization the charity.
That year, artist Ms Dynamite divided her bounty among several good causes, like the NSPCC and a Sickle Cell organization.
"And I donated a thousand pounds to Highgate Newtown, to their gymnastics class, because I did gymnastics when I was a child and they needed updated gear," the artist shared with a publication.
Previously, the band gave their winnings to the local youth club that developed their band, alongside other grassroots music organisations.
And 1994 winners M People gave their award to a charity for MS after a friend was identified with the disease.
"Receiving the award was ample," said vocalist Small. "The cash was the extra but we didn't require the bonus, because we had the honor. So our victory affected somebody else's life."
Last week, the trust shared it had protected two small stages in the South East, by transferring them to public stewardship.
One venue in the city and the other in that location were acquired under the community ownership program, which is backed by Arts Council England and enthusiasts who acquire "ownership units" in the buildings.
