Introduction

Every project starts with an idea. But before work begins, teams need clarity on why the project exists, what it includes, and who is responsible for making it happen. That’s where a project charter comes in.

A project charter is a formal document that authorizes a project and sets its foundation. In this guide, we’ll explain what a project charter is, when you should use one, and why it matters in project management. You’ll learn the key elements of a project charter, how to write one step by step, how it compares to documents like a project plan, and walk through a simple project charter example to see how everything fits together.

What is a project charter?

A project charter is defined as a formal document that authorizes the initiation of a project and defines its purpose, objectives, scope, stakeholders, and high-level deliverables. It serves as a reference point throughout the project lifecycle, providing clarity on its goals and the authority of the project manager.

Typically prepared during the project initiation phase, the charter aligns stakeholders and sets the groundwork for detailed planning.

The project charter is essential because it establishes the legitimacy of the project within an organization. It provides a high-level overview of the project, including its expected outcomes, key stakeholders, and resource needs. This document also outlines the roles and responsibilities of the project team and defines the authority of the project manager, enabling them to make decisions and allocate resources effectively.

One of the primary purposes of the project charter is to ensure alignment among stakeholders. By documenting agreed-upon objectives, scope, and success criteria, it minimizes misunderstandings and sets expectations early. This alignment helps prevent conflicts or scope creep later in the project lifecycle. For instance, a project charter for a software development project might specify that the goal is to create a mobile app with essential features for user authentication, data storage, and analytics, while excluding advanced AI features.

Consider an example: an organization plans to implement a new customer relationship management (CRM) system. The project charter defines the purpose (improving customer data management and streamlining sales processes), objectives (integrate the CRM with existing systems within six months), scope (data migration, system customization, and user training), and deliverables (a fully functional CRM system). The charter also names key stakeholders, including the IT department and sales team, and assigns authority to the project manager to allocate resources and coordinate activities. This document serves as a guiding framework, ensuring that everyone involved understands and agrees on the project's direction.

Why a project charter matters in project management

A project charter sets the direction for a project before detailed planning begins. It creates shared understanding, formal approval, and accountability, which helps teams move forward with confidence.

1. It formally authorizes the project

A project charter acts as an official approval to start the project. It confirms that the project has been reviewed, approved, and aligned with business goals. This authorization signals that the project is a real priority and that teams can begin work with clarity and confidence.

2. It aligns stakeholders on goals and scope

By clearly documenting the project’s purpose, objectives, and high-level scope, the project charter creates alignment among stakeholders early on. Everyone understands what the project is trying to achieve, what is included, and what is not. This shared clarity reduces misunderstandings and conflicting expectations later.

3. It gives the project manager decision-making authority

The project charter defines who owns the project and what level of authority the project manager has. This makes it easier for the project manager to allocate resources, make day-to-day decisions, and keep the work moving forward without constant approvals.

4. It helps prevent scope creep and early misalignment

When expectations, deliverables, and constraints are documented upfront, teams have a reference point to manage changes. The project charter helps spot misalignment early and serves as a guide when new requests or changes arise, reducing the risk of scope creep.

When should you use a project charter?

A project charter is not required for every piece of work. It is most useful when a project needs clear approval, alignment, and ownership from the start.

Where a project charter fits in the project lifecycle

A project charter is created during the project initiation phase, before detailed planning begins. It acts as the starting point that authorizes the project and allows teams to move into planning, resourcing, and execution with shared clarity.

Projects that typically need a project charter

A project charter is especially important for:

• Cross-functional projects, where multiple teams or departments are involved
• High-impact initiatives that support key business goals or strategic priorities
• Long-term or high-risk projects with higher costs, dependencies, or uncertainty

In these cases, a project charter helps establish alignment and reduces confusion early.

When a lighter alternative may be enough

For very small, low-risk internal initiatives, a full project charter may not be necessary. Teams may use a brief project overview, proposal, or internal note instead. However, once a project involves multiple stakeholders or resource commitments, a project charter becomes essential.

Key elements in a project charter with examples

A project charter is a critical document that lays the foundation for a project by outlining its essential elements. The following are the key elements typically included in a project charter, with examples for each:

1. Project Purpose and Justification

This section explains the reason for the project and the problem or opportunity it aims to address. It provides a clear rationale for why the project is necessary and how it aligns with organizational goals or strategies. For example, a project charter for a software development project might state that the purpose is to improve user experience by creating a mobile app for easier access to services.

2. Project Objectives

Project objectives define the success criteria for the project. For instance, a project charter might include objectives like “complete the mobile app development within six months” or “achieve a 20% improvement in user engagement after the app's launch.”

3. High-Level Project Scope

A broad description of the project's scope, including what will and will not be included. This helps set expectations about the project's deliverables and boundaries. For example, a project charter for an office relocation might specify that the project includes moving equipment and employees to a new building, but excludes any renovations to the new office.

4. Project Deliverables

The specific outputs or results that the project is expected to produce. These deliverables should be aligned with the project objectives and can be tangible (e.g., a product or a report) or intangible (e.g., a process improvement). For instance, a project charter for a marketing campaign might list deliverables such as promotional materials, campaign reports, and social media content.

5. Project Milestones

Key phases or checkpoints that the project will go through to track progress. These milestones often represent major deliverables or approvals, such as the completion of the planning phase or the final review of deliverables. For example, a project charter for a product launch might include milestones like "product prototype completion," "user testing phase," and "marketing campaign launch."

6. Project Timeline

An outline of the project’s start and end dates, including major phases or milestones. This section provides a high-level view of when key activities are scheduled to occur and helps set realistic expectations. For example, a project charter for a software development project might note that the development phase will take three months, followed by two months for testing.

7. Project Budget and Resources

An overview of the project's estimated budget, including high-level resource requirements (e.g., personnel, equipment, materials). This section ensures stakeholders understand the financial and resource commitments needed for the project’s success. For instance, a construction project charter might include a budget estimate of $500,000 for labor, materials, and equipment costs.

8. Project Stakeholders

A list of key stakeholders, including project sponsors, team members, and any other individuals or groups who have a vested interest in the project’s success or outcomes. This section clarifies who will be involved, consulted, or informed throughout the project. For example, a project charter for a new software development project might list the project sponsor, the IT department, end-users, and the quality assurance team as key stakeholders.

9. Project Risks and Constraints

An identification of any potential risks, challenges, or limitations that may impact the project, such as resource constraints, regulatory issues, or external dependencies. Recognizing these risks early helps the project team plan mitigation strategies. For example, a project charter for a new product development project might highlight risks such as delays in supply chain delivery or unforeseen regulatory hurdles.

10. Authority and Responsibility

Defines the roles and responsibilities of the project manager and the project team, outlining the level of authority the project manager has in decision-making, resource allocation, and managing the project scope. For example, a project charter might state that the project manager has full authority over project scheduling and budget adjustments but must seek approval for any scope changes.

11. Approval and Signatures

The section where project stakeholders, including sponsors and key decision-makers, formally approve the project charter. This provides a record of agreement and commitment to the project’s objectives, scope, and resources. For example, a project charter for an organizational change initiative would include signatures from senior management to signify their commitment.

How to create a project charter: 8 key steps with examples

Creating a project charter involves several key steps that help ensure the project's goals, objectives, and scope are clearly defined and agreed upon by stakeholders. Below are the essential steps in creating a project charter, along with examples to illustrate each one:

Step 1. Define the Project Purpose and Objectives

Start by identifying the reason for the project and the goals it aims to achieve. This step ensures that everyone involved understands the project’s primary purpose and the results expected. Clearly state what success looks like.

Example: A project charter for a new website development might have a purpose like: "To create an easy-to-navigate website that provides customers with access to product information and a seamless online purchasing experience." Objectives might include: "Launch the website within 6 months" or "Increase online sales by 15% within the first quarter of launch."

Step 2. Identify Key Stakeholders

Determine the key stakeholders involved in the project, such as the project sponsor, project manager, team members, and any external parties impacted by the project. This step helps clarify roles and responsibilities and sets expectations for communication.

Example: In a product development project, stakeholders might include the project sponsor (e.g., the CEO), the project manager, the design team, marketing, and external suppliers.

Step 3. Define the High-Level Project Scope

Outline the high-level scope, which includes both what is in scope and what is out of scope. This step sets the boundaries of the project and helps prevent scope creep.

Example: For a CRM system implementation, the scope might include "Data migration from existing systems to the new CRM" and "Training staff on how to use the new CRM system." Exclusions might include "Developing custom CRM features beyond the standard package" or "Rewriting the existing customer data policies."

Step 4. Set Milestones and Deliverables

Milestones are major checkpoints that help track progress, while deliverables are the specific outputs the project is expected to produce.

Example: In a software development project, milestones might include "Completion of system design," "Alpha testing," and "Final release of the software." Deliverables could be "Completed user interface design" and "User acceptance testing report."

Step 5. Establish the Timeline and Budget

Outline the high-level timeline and budget for the project. This provides a clear understanding of when the project is expected to start and finish, as well as the financial resources allocated.

Example: A project charter for a marketing campaign might include a timeline like: "Start date: January 15, 2024; End date: March 30, 2024." The budget might be "Total budget: $150,000, with $50,000 allocated to media buys and $20,000 for content creation."

Step 6. Identify Risks and Constraints

Identify any potential risks or constraints that could affect the project's execution. This allows for proactive risk management and helps set realistic expectations for stakeholders.

Example: In a construction project, risks might include "Supply chain delays due to material shortages" or "Weather-related delays." Constraints might include "The project must be completed within a fixed budget of $500,000" or "The project must comply with local building regulations."

Step 7. Assign Project Roles and Responsibilities

Assign roles and responsibilities for all key participants, including the project manager, team members, and other stakeholders. This step helps clarify who has authority and decision-making power.

Example: The project manager might be responsible for overseeing the project’s execution and ensuring milestones are met. The design team is responsible for creating the product design, while the IT team handles technical implementation.

Step 8. Define Approval and Signatures

Outline the approval process and include a section for the signatures of the project sponsor, project manager, and key stakeholders. This formalizes the agreement and commitment to the project.

Example: At the end of a project charter for an office renovation, stakeholders such as the CFO, project sponsor, and the facilities manager would sign to approve the project’s scope, timeline, and budget.

Who creates, owns, and approves the project charter?

A project charter is a collaborative document, but specific roles are responsible for creating, approving, and owning it throughout the project lifecycle.

Who creates the project charter

The project charter is usually created by the project sponsor, with active input from the project manager. The sponsor provides the business context, goals, and justification, while the project manager helps shape the scope, timeline, and practical constraints. This collaboration ensures the charter is both strategic and realistic.

Who approves and signs the project charter

The project charter is formally approved and signed by the project sponsor. In some cases, senior stakeholders or leadership may also review or approve it, especially for high-impact or cross-functional projects. Their sign-off signals commitment and shared accountability.

What approval of a project charter means

Approval of a project charter has two important outcomes:

• It formally authorizes the project to begin
• It gives the project manager clear authority to use resources, make decisions, and coordinate work within the agreed scope

Once approved, the project charter becomes the official reference point for the project.

Project charter vs other project documents

Project management uses several planning and approval documents, and they often get confused with each other. While they may overlap in content, each document serves a different purpose in the project lifecycle.

Project charter vs project plan

A project charter is a high-level document that formally authorizes a project. It defines why the project exists, what it aims to achieve, and who is responsible.

A project plan is created after the charter is approved. It focuses on execution and details how the work will be done, including tasks, timelines, dependencies, and resources.

In short, the project charter approves the project, while the project plan explains how the approved work will be delivered.

Project charter vs project brief or project poster

A project charter is a formal governance document used to gain approval and set direction early in the project.

A project brief or project poster is usually a lightweight summary used to communicate the project at a glance during execution. It is more flexible and often visual, but it does not replace formal approval.

The charter starts the project, while the brief or poster helps communicate it.

Project charter vs business case

A business case focuses on justification. It explains why the project should exist by evaluating costs, benefits, risks, and return on investment.

A project charter comes after the idea is approved. It authorizes the project and aligns teams around goals, scope, and ownership.

Simply put, the business case proves value, while the project charter approves and activates the work.

Project charter vs project proposal

A project proposal is used to pitch an idea or request approval for a new initiative.

A project charter is created once the proposal has been accepted. It formally initiates the project and gives the project manager authority to proceed.

The proposal asks for approval, while the project charter confirms it and turns the idea into an active project.

Best practices for managing a project charter in project management

Managing a project charter effectively is critical in project management as it sets the foundation for a project’s objectives, scope, stakeholders, and overall alignment with organizational goals. Best practices ensure that the project charter serves as a reliable guide throughout the project lifecycle. Here are key best practices:

1. Clearly define the purpose and objectives

• Begin with a concise and well-articulated purpose for the project, explaining why it is being undertaken and how it aligns with organizational goals.
• Clearly outline objectives in measurable terms (e.g., specific deliverables, timelines, or financial targets). This creates a shared understanding of what success looks like.
• Include SMART criteria (specific, measurable, achievable, relevant, time-bound) for setting objectives, ensuring they are practical and aligned with the project's constraints.

2. Involve key stakeholders

• Collaborate with stakeholders, such as project sponsors, team members, and end-users, during the development of the charter. This ensures that their perspectives and needs are considered early on.
• Define roles and responsibilities within the charter to clarify who is accountable for each aspect of the project.
• Establish communication protocols to maintain alignment and engagement among stakeholders as the project progresses.

3. Detail the scope and boundaries

• Clearly define the project scope, including what is included and excluded, to prevent misunderstandings and scope creep.
• Outline high-level deliverables, major milestones, and critical success factors.
• Address any constraints or assumptions, such as budgetary limits, resource availability, or technological dependencies, to provide context and manage expectations.

4. Ensure flexibility and accessibility

• Create a charter that is comprehensive but not overly rigid, allowing for adjustments as the project evolves.
• Store the charter in a centralized and accessible location for easy reference by all team members and stakeholders.
• Revisit and update the charter as necessary during key project phases, particularly when significant changes occur, to keep it relevant.

Conclusion

A project charter sets the foundation for everything that follows in a project. It provides formal approval, clarifies goals and scope, and creates early alignment among stakeholders before detailed planning begins.

By taking the time to define key elements like objectives, scope, stakeholders, risks, and ownership, teams create a shared reference point that supports better decision-making and reduces confusion as work progresses. Whether you are launching a cross-functional initiative or managing a high-impact project, a well-written project charter helps prevent misalignment, scope creep, and unclear ownership.

Used correctly, the project charter is not just a document for kickoff. It is a practical tool that keeps projects grounded, aligned, and focused from initiation through execution.

Frequently asked questions

Q1. What is in a project charter?

A project charter typically includes the project’s purpose, objectives, high-level scope, key stakeholders, milestones, budget, risks, and the authority granted to the project manager. It serves as the official approval to begin the project.

Q2. What are four of the 5 major elements of a project charter?

Common major elements include the project purpose, objectives, scope, stakeholders, and high-level timeline. These form the core structure that guides the project from initiation to planning.

Q3. What is the purpose of a charter?

The purpose of a project charter is to formally authorize a project, align stakeholders on goals and scope, and give the project manager clear authority to use resources, make decisions, and lead the work.

Q4. Who writes a project charter?

The project charter is usually written by the project sponsor in collaboration with the project manager. The sponsor provides strategic context, while the project manager shapes practical details like scope, milestones, and risks.

Q5. What are the 7 steps of a project plan?

Typical steps in creating a project plan include:

1. Define goals and objectives
2. Break down deliverables and tasks
3. Identify dependencies
4. Estimate timelines
5. Allocate resources
6. Identify risks and mitigation strategies
7. Build the schedule and execution plan