What is a project charter?

A project management charter, also known as a project statement or project definition report, is an elevator pitch of the objectives, scope, and responsibilities required for project approval from key project collaborators. This unquestionable source of project details lays the foundation of upcoming projects using short, concise explanations of the main elements that guide your progress. When you put your plans in writing, your team can refer back throughout the project execution phase to avoid budget overextension or scope creep (when a project’s requirements increase over time). 

A project charter also reminds you to include collaborators throughout the project. Knowing in advance who’s necessary for a successful outcome and having it in writing helps ensure you don’t stray from standards and expectations. Project managers should use the charter to:

• Authorize the project.
• Provide shared understanding and serve as a baseline throughout the project.
• Hold all participants accountable for their responsibilities and roles within the project.

Project charters vs. project plans

While a project charter and project plan are similar, they serve different purposes. 

• Project charter: A high-level overview that defines and lays out a project’s terms and crucial details like relevant collaborator information. The project charter provides the parameters that lead to successful project outcomes. 
• Project plan: A basic outline that explains how your team will execute a project on a tactical level. A project plan emphasizes specific processes, actions, and workflows to complete your work efficiently and with high standards. 

Why use a project charter?

The primary purpose of a project charter is to set the guidelines and tone for upcoming projects. Compare it to writing an essay—when writing an essay, the process typically looks like this:

• Research data to support your claims.
• Create an essential structure for your argument.
• Identify and address objections by proactively answering questions that may emerge in the reader’s mind.

You go through a similar process with a project charter. But instead of objections, you’d navigate through obstacles using data that incorporates all information relevant to completing the project. Without a project charter, you will likely stumble through projects, become blindsided by problems, and struggle to find solutions. A project charter’s high-level overview enables you to be proactive rather than reactive, which improves productivity, reduces downtime, and keeps you on schedule. 

How to use a project charter

When using a project charter, you’ll typically document the following aspects of a project:

• Objectives and obstacles
• Timeline
• Risks
• Benefits
• Budget
• Key collaborators

Objectives and obstacles

The first step in creating a project charter is to outline your project’s main objectives and identify potential obstacles. When listing obstacles, include your team’s capacity, available budget, and collaborator requirements.

Timeline

Outline your project’s start and end dates, including any milestones you’ll achieve along the way. If you’re using project management software, transfer this information to your dynamic timeline to track your progress in real-time. 

Risks

There are risks with every project. Plan to avoid or mitigate any risk that threatens the completion of your project by identifying what they are and determining the best course of action for each. 

Benefits

Prioritizing benefits helps you work through your projects effectively. Be specific when determining how your project will positively impact its collaborators, consumers, and end users. 

Budget

Create a high-level financial overview of your project by breaking down your budget, including available funds and anticipated costs. A detailed financial outline helps you stay within budget and gives collaborators a summary of the costs associated with completing the work. 

Key collaborators

Identify everyone with a vested interest in the project’s success. Detail everyone’s role, what you need from them, and how your team can contact them. 

How to create a project charter

Use the information you find most beneficial when creating your project charter template. The more thorough your charter, the more convincing and effective a reference it will be. Every project charter should include a variation of the following categories. 

Name your project

Make the project title as specific as possible. Rather than using generic names like “Software Update” or “Management Initiative” (which don’t differentiate these projects from other project charters, nor do they explain why you’re implementing the project), titles like “Software Update to Allow Mobile Payments” or “New Management Bonus Structure” illustrate your goal from the start. 

Define your purpose, objective, and project details

This section should outline your business case and explain:

• Why the project exists.
• The pain points it can alleviate.
• The project’s impact on the organization.
• What the project entails.
• What your team should accomplish with the project and how it resonates with company-wide goals.
• The steps to make the project work, and how your team should perform them.

Detail your budget

Include how much the project will cost, where the money will come from, and if you require additional resources to execute the project successfully. 

Set your deliverables

What service, product, or result will you achieve when you complete the project? Project charters are flexible, so include information about how you’ll measure the project’s success—how will you know you’ve accomplished your goal? Which defining metrics will you use? 

Narrow the scope and risks

Aim to narrow the scope and risks right from the start of your project. Your charter should state known risks and obstacles and your plans for analyzing and managing risks throughout the process. 

Determine your timeframe and milestones

Outline how you plan to achieve each project step. Your anticipated start and end dates are the most crucial, but a detailed timeline provides the context to keep everyone on time and on the same page. 

List your key collaborators

Your project charter is an internal document; however, you’ll likely have external collaborators, such as clients, other project managers, or teams, involved in your process. A collaborator analysis helps you identify key resources so you can include them in your project charter and make your team accountable for their success.  

Identify team roles and responsibilities

List everyone involved in your project and include their roles. Many charter examples only list the individual’s title or team, but that information alone doesn’t always provide enough detail. If this is the case for you, link your project charter to a detailed document that outlines each person’s role and responsibilities. 

Tips for creating an effective project management charter

 As you work through the steps above, use the following tips to create the most effective project charter possible. 

• Request team insights: Collaborate with your team to determine goals, milestones, obstacles, and threats. Gathering team insights helps create a more accurate project management charter.
• Keep your document short and concise: Your project charter is a high-level overview, not a breakdown covering every detail. Each of your sections should be a couple of sentences at most. Use bullets and charts to help you present your information in an organized, digestible way. 
• Create a customizable template: Once you’ve realized the benefits of a project charter , you’ll likely want one for all of your team’s projects. Create a customizable project charter template you can reuse department-wide to enhance productivity, eliminate repeated work, modify according to scope and needs, and ensure you don’t miss any essential elements. 

What is an example of a project charter?

A project charter can look different across various industries; however, the main elements stay the same. Here’s an example: a team is creating an e-book outlining how to generate positive company reviews.

Company ABC Project Charter

Project Name: “Get Your Clients to Leave 5-Star Reviews” E-book

Project Description: A short informatic e-book explaining popular strategies for boosting customer reviews.

Business Case: Supports company-wide goals, like:

• Improving ABC’s company presence across search engines.
• Increasing sales by 26% this quarter.

Project Deliverables:

• 2000-word e-book
• Landing page for e-book signup
• E-book for continued five-star reviews

Project Benefits:

• Lead generation
• Better reputation
• A resource we can continuously promote.

Project Risks: 

• Technical difficulties
• Possible lack of team expertise

Project Budget: Not to exceed $1,500

Project Milestones: 

• Outline complete – November 12, 2023
• Chapters ready for editing – December 5, 2023
• Launch – December 18, 2023

Project Team Members: 

Here’s where you can link to a detailed document outlining each person’s role, responsibilities, and contact info.

• Project Manager – Sherri G
• Copywriter – Ted S
• Additional Copywriter – Tyler H
• Editor – Lynette W
• Landing Page Creator – Debra C
• Marketing Coordinator – Josh R

Keep your project charter short as you outline the key benefits and goals of the project. This at-a-glance guide helps your team understand the need for the project and can be used as a marketing tool and reference point to keep everyone focused, productive, and successful.