The star has given the entirety of his £25,000 award cash to the trust for venues, which works to preserve the United Kingdom's independent live music spots.
The star was awarded the prize on 16 October as his new release People Watching was chosen as the top album of the last 12 months.
The musician has decided to donate the funds to the MVT, in recognition of the vital role grassroots venues fulfilled in his beginning days.
"I wouldn't be doing what I am doing today if it wasn't for all the gigs I performed around the area, and further afield, when I was starting out," said Sam Fender. "These spaces are iconic, but they are facing challenges."
Beginning in 2023, more than 150 of these spaces have ceased operations – approximately 16 percent of the entire UK sector.
In the last year, major artists like the band Pulp, Coldplay, Katy Perry and Ed Sheeran have all supported the trust in its attempts to keep the scene afloat, by applying a small levy to their ticket prices, which benefits local stages.
Sam Fender also participated, raising more than £100,000 on his 2024 arena tour to assist numerous small stages across the UK.
The donation assisted spaces that were facing possible closure due to difficulties caused by floods, fires and personal losses, as well as regulatory hurdles, legal disputes and noise complaints.
Additional spaces were granted funding support in upgrading facilities and sound and lighting systems that positively impacted performers and concertgoers.
"The notion that revenue from performances in big venues helps the local stages, where it kicks off for musicians like me, is just logical," Fender has stated.
The musician is far from the only musician to contribute his Mercury Prize prize money to worthy causes.
When they received the trophy in 1996 for their record their work, lead singer Cocker declared that the act would contribute their winnings to the non-profit War Child.
During 2002, musician Ms Dynamite split her award among a few charities, including the NSPCC and a Sickle Cell organization.
"I also contributed a thousand pounds to my local community centre, to their gymnastics program, because I trained in gymnastics when I was growing up and they needed new equipment," the artist told a publication.
In recent years, Ezra Collective contributed their funds to the local youth club that nurtured their group, alongside other local music groups.
Additionally the 1994 recipients M People contributed their award to a MS organization after a acquaintance was identified with the illness.
"The victory was sufficient," stated singer Small. "The prize was the extra but we didn't require the extra, because we had the honor. So our victory affected somebody else's life."
Recently, the Music Venues Trust shared it had protected several grassroots venues in south-east England, by bringing them into local control.
The Joiners in the city and The Croft in Bristol were acquired under the Own Our Venues initiative, which is supported by Arts Council England and supporters who acquire "ownership units" in the buildings.
