Eph 2:8 For by grace (XARIS) are ye saved through faith (PISTIS); and that (TOUTO) not of yourselves: it is the gift of God:
TOUTO ("that") cannot refer to either PISTIS ("faith") nor can it refer to XARIS ("grace"). It is neuter while those nouns are feminine, and a pronoun must agree with its antecedent in gender. But we have no antecedent which agrees with it, neither prior nor following it. This is a demonstrative pronoun with adverbial force used in an explanatory phrase.
We can see a parallel between "not of yourselves" in vs. 8 and "not of works" in v 9 that leads us to ask, "What is Paul saying in not of yourselves and not of works?" I think he clearly is referring to "salvation," though that noun is not used. What Paul is saying is that "salvation is the gift of God."
Why did Paul use a neuter demonstrative pronoun here? Well, when referring to a main idea in a general way, it's quite common to use a neuter pronoun. IOW, if Paul had wanted to say,
"For by grace you are saved through faith, and this salvation we're talking about is not a result of works, it's a gift, so no one can boast about it."
The neuter pronoun would have been used.
Faith is best understood here as the response of people to the working of the Holy Spirit. When someone acknowledges that he is a sinner and in need of a Savior, how could that ever be understood as work? To recognize that we cannot save ourselves, and need Christ to save us is just the opposite of work... it is to give up striving to save ourselves, and represents the epitomy of non-work.
Faith is not like water which can be poured or clay which can be handled. So to say that God works to bring about faith in someone does not mean that the individual opened up a package and took out some faith. We cannot say, "I think I'll believe in Jesus Christ. Oh, I don't really in my mind accept it as a fact that He is supposed to have died for me, but I choose to believe in it anyway." Such would be ludricuous. God sent His Holy Spirit to convict men of sin and to enlighten darkened and depraved minds to the truth (John 16:8-11). God is at work in our lives and minds to cause us to consider truth. He illuminates truth. As we seek more truth, more light is given to us, and we eventually genuinely believe the gospel.
If faith is a gift and not a response, then people no longer bear any responsibility to believe the Gospel. Yet the Bible is filled with such appeals. But it can also be said that we will not believe the gospel unless God works to bring it about in our lives. To say otherwise is to ignore the condition of our hearts and minds as described in Romans 3.