Key takeaways
Project charter definition
A project charter is a key document in project management that formally authorizes a project’s launch. Essentially, it’s the green light that sets the stage for the project, ensuring everyone involved has a clear understanding of the project’s purpose and direction.
Project charters are widely recognized across industries as the foundational document to kick off any project, but the concept of a project charter finds its roots in business and engineering practices. In these industries, a project’s documentation is essential to ensuring alignment on goals and expectations. As project management methodologies have evolved, the project charter has become a standard tool in the Project Management Body of Knowledge (PMBOK).
Parts of a project charter
At a minimum, a project charter should include the following information:
Learn more about project charters in this video overview:
Project charters vs. project plans
While a project charter is a foundational document that kickstarts a project by offering a brief overview, a project plan is a more specific roadmap for the project’s execution, monitoring, and control. This roadmap includes details like timelines, resources, budgets, and potential risks.
Without the charter, it would be difficult to know where to start, and without the plan, it would be difficult to know what to do next. The table below illustrates how the information from the charter lays the groundwork for the project plan.
| Project charter | Project plan |
|---|---|
| A timeline of relevant milestones leading up to the targeted completion date. | Task schedules for each milestone that include dependencies, deadlines, and prioritization. |
| A list of all participants, like investors, contractors, and employees. | Stakeholder communication plans and meeting schedules. |
| Expected obstacles and risks, with a summary of contingency plans. | Plans for managing risks, addressing changes, controlling costs, and allocating resources. |
| High-level cost estimates and financial impact analysis. | Detailed budget information, including expense categories and receipts. |
Also read: Defining a Project Management System
How to write a project charter
By following these steps, you can craft a charter that sets your project up for success.
1. Summarize the project purpose and justification
Begin by clearly articulating the reasons for undertaking the project and the specific problem or opportunity the project aims to address. Ensuring the project aligns with the organization’s strategic objectives is essential, but so is brevity — avoid adding details that are more relevant to the project plan.
2. Determine the scope
Establish the boundaries of what activities, outcomes, and deliverables will be included in the project. Specifying what falls outside the project’s purview is equally important to prevent scope creep. Even if an out-of-scope task is valuable, it’s usually best to save it for a future project to avoid throwing the current project off course.
3. Identify stakeholders
List everyone with a vested interest in the project, including team members, contractors, clients, and sponsors. Clarify each person’s role and highlight key stakeholders with decision-making authority. This will be particularly valuable for creating approval workflows and preventing bottlenecks in the planning phase.
6. Set the budget
Provide an overview of the project’s estimated costs and financial resources. Like the purpose statement, this should be brief. Save the specific expense categories for the project plan, but include details about expected funding sources, tracking measures, and the project’s broader financial impact.
7. Define milestones and timing
Outline the high-level goals for the project and provide a general timeline. The details will be covered in the work breakdown structure and project schedule, but this will give stakeholders a general sense of the project’s duration and major checkpoints.
8. Discuss risks and assumptions
Pinpoint potential challenges and limitations that could affect the project’s trajectory. This may include compliance requirements, supply chain uncertainties, budgetary restrictions, staffing challenges, and other variables. Summarize the contingency plans for risks that are particularly significant so stakeholders are aware of alternate paths.
Why do we need a project charter?
The project charter’s significance lies in its ability to provide a clear understanding of why the project exists and what it aims to achieve.
As a project’s north star, the charter safeguards against scope creep and budget overruns. It also sets clear expectations for stakeholders, creates a baseline for accountability, and helps avoid confusion, conflict, and misunderstanding down the line.
Some project management tools like Wrike, Asana, and Smartsheet include features that help you create standardized project charters quickly and easily. Check out our Project Management Software Guide to compare these and hundreds of other solutions alongside our top recommendations.
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