The artist has given the complete sum of his £25k award cash to the trust for venues, which works to save the UK's grassroots music venues.
The star was given the award on mid-October as his latest record his work was chosen as the top album of the previous year.
The musician has decided to hand the money over to the Music Venues Trust, in recognition of the vital role small stages had in his early career.
"I personally wouldn't be doing my current career if it weren't for all the shows I played around the North East, and elsewhere, when I was beginning," stated Sam Fender. "These spaces are legendary, but they are in difficulty."
From early 2023 onward, over 150 of these venues have permanently closed – about 16 percent of the whole industry in the UK.
In the last year, well-known musicians like Pulp, Coldplay, the singer Katy Perry and Ed Sheeran have all backed the trust in its efforts to support the industry, by applying a minor surcharge to their admission fees, which supports smaller concert halls.
He also took part, generating over £100k on his 2024 arena tour to help numerous local spots across Britain.
These funds helped locations that were confronting imminent closure due to challenges stemming from floods, blazes and personal losses, as well as permit problems, conflicts and noise complaints.
Other venues received monetary aid in upgrading facilities and technical equipment that helped artists and concertgoers.
"The idea that money from performances in big venues helps the smaller venues, where it kicks off for performers like me, is just sensible," Sam Fender has said.
Fender is far from the only musician to contribute his Mercury Prize funds to worthy causes.
Back when Pulp earned the prize in 1996 for their release Different Class, vocalist Cocker declared that the group would contribute their cash to the non-profit the charity.
During 2002, rapper and singer the artist split her bounty among a few organizations, like the NSPCC and a charity for Sickle Cell.
"I also gave a £1,000 to the center, to their classes, because I trained in gymnastics when I was younger and they needed better apparatus," Ms Dynamite shared with the media.
Two years ago, the band contributed their funds to the local youth club that developed their band, in addition to other local music groups.
And 1994 winners the group gave their prize to a charity for MS after a close contact was found to have the illness.
"The victory was sufficient," stated artist Small. "The cash was the cherry on top but we didn't need the bonus, because we had the main prize. So our victory touched another person's life."
Last week, the Music Venues Trust announced it had rescued two grassroots venues in that region, by bringing them into local control.
The Joiners in the city and The Croft in the city were acquired under the public acquisition initiative, which is backed by a national body and supporters who acquire "stakes" in the properties.
