A covenant is a relationship based on mutual respect, trust and commitment in which two or more people are willingly bound together by a common and ethical purpose. That purpose is bigger and more important than any one individual and it provides meaning and hope for everyone involved. In the 1830's Alexis de Toqueville observed that the strength of America was found in what he called "covenants" that existed between and among its people, covenants in which they cooperated, helped and supported one another in ways that created functional communities.

Sometimes a contractual relationship can lead to a covenant, but that is a direct result of the leadership and choices of the people involved. The following is a matrix that demonstrates some of the differences between covenant and contract.