Project Charter | A Comprehensive Guide

What is a project charter? This comprehensive guide provides you with more than an academic definition. It answers the question, shares practice experience, and provides a wealth of additional information. You can trust it to point you confidently in the right direction. 

If you’re in a hurry to get started, here’s a project charter template. We prefer this one because it aligns with “widely recognized good practices in project management.” By the end of this post, you will understand what that means. Hopefully, you will see why it matters.

What is a Project Charter? 

This sounds like a straight-forward question; one that could be answered with an academic definition. If you use that definition as a starting point, then lift your head to look beyond it, you’ll have a more complete understanding of the charter. 

Let’s start with an academic definition provided by our professional organization, Project Management Institute(PMI®). It has been used for years.

PMBOK® Guide, Seventh Edition defines the project charter as, “A document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities.” (Project Management Institute, 2021, p.245)  

Like many academic definitions, it’s a bit antiseptic. In other words, it could fit the needs of any organization. In practice, it fits few very well. Here’s why.

From this definition, all we know about a project charter is:

1. it’s a document,
2. by whom it is issued, and
3. two things the document must do.

Consider this scenario. The owner of a diner writes on a napkin before going home, “Get started Pat. Make sure they get it done.” This fits the academic definition of a project charter.

In practice, it sometimes happens this way. The diner is being inspected tomorrow. Tonight, the kitchen space gets cleaned and reorganized, and a new outlet will be installed. On this project, the diner owner is the project sponsor, the kitchen staff are the project team, and Pat is the project manager. Here, the napkin project charter also fits the organizational needs. That’s the important part.

The Issuance of a Charter is Not the Only Way to Authorize a Project.

Know that the issuance of a charter is not the only way to authorize a project. In some organizations, projects are authorized verbally. An “OK” is all that is needed to begin applying organizational resources. For them, the napkin requires too much process. 

Further, the issuance of a document titled “Project Charter” doesn’t always authorize a project, even if the document is 200 pages long. In some organizations, charters are drafted to present potential projects for evaluation and selection. Approval authority may come from an entirely different process. 

In Practice, the Very Definition of “Project Charter” Must Be Tailored.

Each organization implements their own project management processes, and those processes vary greatly. A charter may or may not authorize the project and it may or may not authorize the project manager to apply organizational resources. The processes are dependent upon how the charter is defined.

For this reason, the definition of a Project Charter matters. If the processes don’t fit organizational needs, they won’t be effective. 

If the processes don’t fit organizational needs, they won’t be effective. 

What is the Purpose of a Project Charter?

In some organizations, if a charter is approved, its purpose is to initiate a project. 

Well ahead of that approval, the project charter may have other purposes. Here’s a list of some of them:

• clarify the project purpose, 
• define the project scope, 
• cast the vision for project success,
• support the evaluation, prioritization, and selection of projects,
• ensure proper performance of the contract, and
• identify and assign the project manager (Project Management Institute, 2013, p.66)  

In some organizations, after the project charter is approved, its purpose changes. After approval, the charter becomes a roadmap for the project manager. It is an important input to project planning.

The purpose of the charter varies depending upon organizational needs.

Can a Project Succeed Without a Charter?

Absolutely! 

The napkin charter described above didn’t define the success criteria for that project. There, the success criteria is implied. The diner must pass inspection.

Further, your experiences may tell you that the project charter isn’t the only document that identifies success criteria. Success criteria are also specified in performance contracts and in project management plans. 

The question shouldn’t be whether a project can succeed without a charter. The better question is whether having a project charter increases the likelihood of project success. We think it does. When you understand the benefits of a project charter, we suspect you will agree.

Having a project charter may increase the likelihood of project success.

What Are the Benefits of a Project Charter?

Projects receive numerous benefits by having a charter, most of which support project success. Here are a few potential benefits:

• The charter can clarify the project vision. When it does, it is an important document for distilling a “meeting of the minds.” When we’re all pushing in the same direction, the likelihood of project success increases. 
• Some project charters align project objectives with business strategy. This practice has the potential to increase organizational efficiency and decrease waste.
• Prepared consistently, the charter can be a good tool for comparing and prioritizing projects. When we examine the same facts about every potential project, we are better positioned to eliminate those that don’t align with strategic objectives and those with lower returns on investment.
• Typically, the project charter presents project highlights which are useful for explaining the project to others and obtaining their buy-in. This makes it a valuable tool for those who champion the project.
• Often, the project charter defines the project scope. This is obviously important for planning scope management, but it’s also crucial for planning budget, resources, schedule, quality, risk, and procurements.
• Some charters define success criteria. This means, the project manager can make plans to ensure the criteria are achieved. It improves the likelihood of achieving project success.
• In some organizations, approved charters authorize the application of organizational resources. This practice helps prevent unauthorized waste.
• Project charters identify the project manager. A separate communication is not necessary.

Tip: The benefits of having a project charter should outweigh the burden of preparing one.

Why Should the Project Charter Align with Business Strategy?

There is an article appearing on the Forbes website titled, “What is the Purpose of a Company.” According to the author, the purpose of a company, “..is to have a meaningful vision and then to be profitable in achieving it.” (Nevins, 2022) 

If we accept this definition, then it’s easy to see why the project charter must align with business strategy. The performance of unaligned projects create waste, and they dilute an organization’s focus.

By aligning the charter with business strategy, organizations are better positioned to: 

• eliminate wasted efforts,
• reinforce the business strategy,
• use resources more efficiently, and
• improve organizational productivity.

When project objectives align with business strategy, there is increased organizational value.

(Note that strategic alignment is not included in an academic definition of a project charter.)

When Should a Project Charter Be Prepared?

Although a charter can be prepared any time in the project lifecycle, the best practice is to prepare it during the project initiation phase. As a matter of efficiency, it should be prepared in advance of project planning and before significant resources are applied. 

It takes fewer resources to prepare a project charter, and decide against starting a project, than it does to prepare a project management plan and make the same decision.

As a matter of efficiency, a project charter should be prepared before the significant resources are applied.

Who Writes the Charter?

In some organizations, the project sponsor writes the project charter. In other organizations, project managers and functional managers draft charters. Frankly, anyone can write a project charter.

Ideally, the assigned project manager should draft the project charter. At minimum, the assigned project manager should be involved in writing it because the charter can impact project success. 

For example, a charter can make an assignment of inadequate resources. It can fail to clarify the scope of work, not specify the success criteria, and fail to establish an achievable project schedule. The project manager is best positioned to spot these problems. 

The assigned project manager should develop, or be involved in developing, the project charter.

Is a Project Charter a Single Document, a Multi-page Document, or a Collection of Documents?

The answer is yes. A project charter can be all these.

As presented in a conference paper at PMI Global Congress, Alex Brown points out that a project charter, “..does not need to be contained in a single document.” (Brown, 2005)

He explains that ideally, the charter will be contained in one document that authorizes the project and references other documents containing the business need. His paper explains how the format of the project charter varies, organization to organization.

Like all project documents, the project charter must be tailored to fit organizational needs.

What Should a Charter Include?

Again, the project charter should be tailored to fit organizational needs. That said, there are some widely recognized good practices regarding the contents of one. When they are included in the project charter template, it provides a good starting point for subsequent tailoring. Those good practices provide for documenting:

• the project name and identifying information,
• document versioning information,
• executive summary,
• project purpose,
• a description of how project objectives tie to specific strategic objectives,
• project requirements,
• scope statement,
• list of deliverables,
• estimated schedule,
• estimated budget,
• human resource requirements,
• procurements,
• known risks,
• completion criteria,
• success criteria,
• assumptions,
• constraints,
• alternatives to performing the project,
• stakeholder list,
• identification and assignment of the project manager,
• identification of the project sponsor, and
• a section for obtaining signed approval.

Tailor the project charter template to fit the needs of your organization.

Where Do I Find a Project Charter Template?

An internet search will return a plethora of project charter templates. They’re a dime a dozen and many are free. Regardless of what template you select, you must tailor it to fit the needs of your organization.

I prefer working with this project charter template as my starting point, and not because I drafted it. I prefer it because it aligns with widely recognized good practices in project management. 

As an added benefit, it’s designed to work with a collection of templates that expedite development of project management plans. That’s why it is included in The Practitioner’s Book of Project Management Templates. 

How Do I Tailor the Template?

You tailor a project charter template by considering your practice experiences, and the needs of your organization. The best way to understand the needs of your organization is to obtain stakeholder engagement. 

Stakeholder engagement is the most important part because it will help you identify organizational needs you may not be aware of. Further, stakeholder engagement can help you identify where too much process may hinder the satisfaction of those needs.

Sometimes, project managers work so diligently to ensure project success that we create more process than anyone needs. Take a moment and allow this to sink in. Where there is process not tied to need, there is waste.

To be effective, the project charter must fit organizational needs.

What if I Don’t Have Much Experience?

At the beginning of this post, I communicated that our template “aligns with widely recognized good practices in project management.” By that I mean, it is prepared in alignment with processes identified in an edition of PMBOK Guide. 

Why would I use PMBOK Guide as my point of alignment? PMBOK Guide benefits from the input and feedback of a global community of practitioners serving in different roles, from different industries and organizations. The processes described therein account for the experiences of many.

When you work with templates that aligns with these processes, they provide the right nudges and prompts for tailoring. They place the experience of many professionals behind you. 

When you begin from a place of alignment, the only other information you need will come from your organization. You must engage the stakeholders and carefully examine organizational needs. No template can do that, but don’t worry. You can. 

Templates don’t engage stakeholders or survey organizational needs. Project managers do that.

The Takeaway

No matter what you read about project management, no matter where you read it; processes, plans, and templates alike must all be tailored to meet organizational needs. 

Ready to Draft a Project Charter?

Download your template and get started.

References

Brown, A. S. (2005). The charter: selling your project. Paper presented at PMI® Global Congress 2005—North America, Toronto, Ontario, Canada. Newtown Square, PA: Project Management Institute. https://www.pmi.org/learning/library/charter-selling-project-7473

Nevins, Mark (2022). What is the Purpose of a Company? Forbes. https://www.forbes.com/sites/hillennevins/2019/08/28/what-is-the-purpose-of-a-company

Project Management Institute. (2013). A guide to the Project Management Body of Knowledge (PMBOK® guide) (5th ed.). Newtown Square, PA: Project Management Institute.

Project Management Institute. (2021). A guide to the Project Management Body of Knowledge (PMBOK® guide) (7th ed.). Newtown Square, PA: Project Management Institute.

About the Author
Kimberlin R. Wildman, JD, PMP is a former attorney, a PMP certified project manager, a federal proposal manager, and the founder of MyPM. She has two decades of experience interviewing subject matter experts, spotting opportunities, and leading projects to successful closures. Author Bio