What is sweat equity?
Sweat equity is a term used often when talking about the creation or building process. It’s about doing the work — the hard work — to bring an idea to life.
That work becomes an investment in the project. It can be an investment as real as money or land.
According to Investopedia, an online financial resource, sweat equity is the “contribution to a project or enterprise in the form of effort and toil. Sweat equity is the ownership interest, or increase in value, that is created as a direct result of hard work by the owner(s). It is the preferred mode of building equity for cash-strapped entrepreneurs in their start-up ventures, since they may be unable to contribute much financial capital to their enterprise.”
“I’m actually building my own house. Putting my own heart, working with my own hands, the sweat, blood, everything into it.”— Toyea, Habitat homeowner
How does sweat equity work at Habitat for Humanity?
Sweat equity can take many forms for future homeowners partnering with Habitat. Essentially, it’s a new homeowner investing work in their home or one for another family. It’s an opportunity for families to help build their home alongside volunteers and play an active part in making their dream of owning a home a reality.
“Sweat equity is a transformational experience for families and a cornerstone of our homeownership program,” says Sonia Lee, director of homeowner and mortgage services at Habitat for Humanity International. “The skills and knowledge gained through activities like volunteering on a build site or taking financial literacy classes help set new homeowners up for success long-term.”
Eight ways families put the “sweat” in sweat equity with Habitat
- Performing construction work on their home or another family’s home. Common activities can include framing or raising walls.
- Clearing debris from build sites to make way for new construction.
- Serving as a greeter or helping customers find the perfect item for their DIY project at a Habitat ReStore.
- Writing thank you cards to local donors or filing or performing other administrative tasks.
- Helping to make lunches for volunteers on a build site.
- Children can also sometimes contribute to the family’s sweat equity by earning good grades in school. Chipola Area Habitat for Humanity in Florida awards one hour of sweat equity for every “A” that a child earns.
- Participating in homeowner classes. Throughout the process of purchasing their home, future homeowners can earn sweat equity credit as they learn about their mortgage, insurance, maintenance, home safety and more.
- Documenting a disaster preparedness plan or preparing a home hurricane preparation kit.
The power of lending a hand
The idea behind sweat equity, families working side by side with volunteers to build their homes, goes back to even before Habitat for Humanity was founded in 1976.
Clarence Jordan, the founder of Koinonia Farm where Habitat for Humanity began, dreamed of helping families break the cycle of poverty and helping to end injustices that barred families of color from achieving economic equity. At Koinonia Farm, he invited families, both Black and white, to live in community while sharing ideas and working the land. Together, with farm residents Millard and Linda Fuller, he developed the concept of “partnership housing,” where those in need of decent homes would work alongside each other to build affordable houses.
That co-worker approach informs Habitat’s emphasis on sweat equity: all of us working together so that homeowners around the world are able to achieve strength and stability as they build better lives for themselves and for their families.
Subscribe to our monthly newsletter
Get our latest news, volunteer opportunities, DIY tips and other ways to get involved with Habitat for Humanity.