The star has given the complete sum of his £25k award cash to the Music Venues Trust, which works to protect the UK's grassroots music venues.
The star was awarded the prize on October 16 as his new release his work was chosen as the outstanding release of the past year.
The musician has decided to hand the money over to the MVT, in appreciation of the crucial part local spots had in his early career.
"I wouldn't be doing my current career if it wasn't for all the gigs I performed around the area, and beyond, when I was starting out," remarked the artist. "These locations are renowned, but they are facing challenges."
Beginning in 2023, at least 150 of these locations have ceased operations – about one-sixth of the whole industry in the UK.
Over the past year, major artists including the band Pulp, Coldplay, Katy Perry and Sheeran have all backed the Music Venues Trust in its attempts to keep the scene afloat, by including a modest fee to their ticket prices, which supports local stages.
Sam Fender also took part, raising more than £100,000 on his live tour to help thirty-eight small stages across Britain.
The donation supported locations that were facing imminent closure due to issues stemming from floods, fires and family tragedies, as well as permit problems, conflicts and noise complaints.
Additional spaces obtained financial assistance in improving facilities and sound and lighting systems that directly benefitted artists and concertgoers.
"The concept that funds from shows in big venues backs the smaller venues, where it begins for performers like me, is just logical," the star has said.
The musician is not the first artist to give his Mercury Prize funds to good deeds.
In Pulp received the prize in the mid-90s for their album Different Class, frontman the singer announced that the band would give their winnings to the organization War Child.
During 2002, rapper and singer she shared her bounty between multiple organizations, such as the NSPCC and a Sickle Cell organization.
"And I gave a grand to my local community centre, to their classes, because I practiced gymnastics when I was younger and they needed updated gear," the artist shared with outlets.
Two years ago, the band gave their winnings to the community center that supported their act, as well as other grassroots music organisations.
And the 1994 recipients M People gave their winnings to a charity for MS after a close contact was found to have the illness.
"Winning was ample," stated singer Heather Small. "The money was the cherry on top but we could do without the bonus, because we had the main prize. So our success impacted somebody else's life."
In the past week, the MVT announced it had rescued a couple of grassroots venues in that region, by transferring them to local control.
One venue in the city and the other in Bristol were acquired under the Own Our Venues initiative, which is backed by a national body and enthusiasts who acquire "stakes" in the venues.
