Grace can't sit out with Yankee (8)
I believe the answer is:
sanctity
'grace' is the definition.
(thesaurus)
'can't sit out with yankee' is the wordplay.
'out' indicates an anagram (out can mean wrong or inaccurate).
'with' says to put letters next to each other.
'yankee' becomes 'y' (phonetic alphabet: alpha, bravo, charlie etc.**).
'cant'+'sit'='cantsit'
'cantsit' with letters rearranged gives 'sanctit'.
'sanctit'+'y'='SANCTITY'
(Other definitions for sanctity that I've seen before include "Untouchable quality" , "Tiny acts (anag) - godliness" , "Devotion" , "Righteousness" , "Saintliness" .)