The star has given the entirety of his £25,000 award cash to the MVT, which operates to protect the UK's grassroots concert spaces.
Fender was awarded the cheque on mid-October as his third album the album was declared the best record of the previous year.
Fender has opted to donate the funds to the MVT, in appreciation of the vital role small stages played in his early career.
"I would not have achieved my current career if it weren't for all the performances I did around the area, and elsewhere, when I was just getting going," said Fender. "These locations are legendary, but they are facing challenges."
Since the start of 2023, over 150 of these venues have permanently closed – about one-sixth of the whole industry in the UK.
In the last year, top acts including Pulp, Coldplay, Katy Perry and Ed Sheeran have all aided the Music Venues Trust in its initiatives to help venues survive, by applying a modest fee to their ticket costs, which supports local stages.
Fender also took part, generating more than £100,000 on his 2024 arena tour to assist numerous grassroots venues across Britain.
These funds assisted venues that were facing possible closure due to difficulties stemming from floods, fires and personal losses, as well as licensing issues, legal disputes and noise complaints.
Some locations received monetary aid in upgrading infrastructure and sound and lighting systems that positively impacted musicians and audiences.
"The idea that funds from shows in large arenas supports the independent spots, where it begins for artists like me, is just sensible," the star has stated.
Fender is among several artists to contribute his Mercury Prize winnings to good deeds.
In the band earned the prize in the year 1996 for their record Different Class, vocalist Cocker announced that the band would give their winnings to the charity War Child.
During 2002, rapper and singer the artist divided her prize among a few good causes, like the children's charity and a Sickle Cell organization.
"Additionally, I donated a thousand pounds to the center, to their gymnastics class, because I practiced gymnastics when I was younger and they lacked new equipment," the artist explained to the media.
Previously, the band donated their prize money to the local youth club that supported their group, alongside other independent music bodies.
Additionally the 1994 recipients M People contributed their prize to a charity for MS after a close contact was identified with the disease.
"Receiving the award was quite enough," remarked singer Heather Small. "The cash was the bonus but we didn't need the cherry, because we had the cake. So our winning touched the lives of others."
Recently, the MVT announced it had rescued two small stages in the South East, by placing them under public stewardship.
One venue in Southampton and the other in that location were bought under the Own Our Venues program, which is supported by a national body and enthusiasts who purchase "stakes" in the venues.
