The star has donated the complete sum of his £25k honor cash to the Music Venues Trust, which operates to save the Britain's small music venues.
The star was awarded the cheque on 16 October as his latest record his work was declared the best record of the last 12 months.
The musician has decided to hand the money over to the trust, in acknowledgment of the crucial part grassroots venues played in his beginning days.
"As an artist couldn't be pursuing what I am doing today if it wasn't for all the gigs I played around the area, and further afield, when I was beginning," remarked Fender. "These spaces are iconic, but they are in difficulty."
Since the start of 2023, more than 150 of these venues have shut down – about 16 percent of the total UK scene.
Recently, top acts like the band Pulp, Coldplay, the singer Katy Perry and Sheeran have all aided the MVT in its initiatives to help venues survive, by adding a small levy to their admission fees, which supports smaller concert halls.
Fender also participated, raising more than £100,000 on his live tour to assist 38 small stages across Britain.
The money supported spaces that were facing imminent closure due to difficulties arising from flooding, fires and personal losses, as well as licensing issues, legal disputes and noise complaints.
Other venues received monetary aid in modernizing amenities and technical equipment that directly benefitted performers and concertgoers.
"The concept that revenue from shows in large arenas helps the smaller venues, where it begins for artists like me, is just sensible," Fender has said.
Fender is not the first artist to donate his Mercury Prize prize money to good deeds.
In Pulp earned the award in the mid-90s for their album Different Class, frontman Cocker declared that the act would give their prize money to the charity War Child.
In 2002, artist the artist split her bounty among a few organizations, including the NSPCC and a Sickle Cell organization.
"And I gave a grand to Highgate Newtown, to their gymnastics program, because I did gymnastics when I was younger and they required new equipment," the artist told outlets.
Previously, Ezra Collective contributed their funds to the community center that nurtured their act, as well as other grassroots music organisations.
Also winners that year M People donated their award to a multiple sclerosis charity after a acquaintance was diagnosed the illness.
"Winning was quite enough," remarked vocalist Small. "The cash was the cherry on top but we didn't require the bonus, because we had the honor. So our winning touched the lives of others."
In the past week, the trust revealed it had rescued two small stages in south-east England, by placing them under local control.
The first in the city and The Croft in that location were bought under the public acquisition program, which is funded by a national body and music fans who purchase "stakes" in the venues.
