If you’re a project manager looking to kick off your new project on the right foot, a thoughtful, comprehensive project charter is not only a great way to start but also saves you time down the line. But what exactly does that look like? What makes a charter well-written? And, what’s the difference between a charter and a statement of work (SoW)?
In this guide, I’ll describe what a project charter is and how a well-crafted one keeps us on track throughout the project management life cycle. You’ll also find project charter samples and a project charter template.
What is a Project Charter?
A project charter is a formal document that outlines the shared understanding of a project’s scope, development, and project objectives, while also defining the roles and responsibilities of each party involved. It’s generally a fairly short document.
If you research “project charter” online, common definitions are pretty abstract. Rather than addressing the purpose of writing a charter, these definitions instead list the components that the charter should contain. No wonder people tend to dismiss the need for a project charter—they don’t understand the “why” behind it!
Project charters are essential documents that give the green light for a project to begin. Similar to the legal definition of the word “charter,” a charter in project management authorizes a project to exist and empowers the project manager to execute the work. With that in mind, here is a more useful definition that captures the purpose of a project charter.
Here's a quick recap:
What is the Goal of Creating a Project Charter?
The goal of creating a project charter is to get your stakeholders to agree on why you’re doing the project, what’s in scope (at a high level), and who’s doing what. Some organizations require a signed project charter before allocating resources, including funding, to your project.
When Should I Create the Project Charter?
The project manager should work with stakeholders to craft the project charter document as part of the project initiation phase. Documenting the purpose of the project, what activities will be part of execution, and who is responsible for performing which activities is critical for aligning key stakeholders to kick off an effort.
The project charter is also useful when monitoring and controlling a project. Documenting project roles and responsibilities and what’s in scope for the effort offers accountability in case disagreements arise during project execution.
Project Charter Template & Sample
Download your template here and use this guide as you are completing it—the insights in this article will help you create a rock-solid project charter. We’ve also included a filled-in sample to give you an idea of what yours should look like.
Statement of Work vs. Project Charter vs. Project Plan
It’s easy to confuse a project charter with a SoW with a project management plan (also known as a project plan), as these documents are closely related. Each of these documents serves a different purpose, however. In this section, we’ll define each document and explain when and how you’d want to use it.
Statement Of Work
A SoW addresses the business need for a project, states what is included or not included as part of a project, and describes specific project deliverables. A SoW also typically summarizes project assumptions and proposed acceptance criteria.
A SoW is a crucial point of reference for stakeholders, and it’s absolutely essential for PMs to know how to create a SoW. While a well-written SOW can save you a world of trouble, on the flip side, even a tiny mistake can have massive repercussions down the line.
The project charter authorizes a project manager to spend the project budget to deliver the items identified in the SoW. You can think of the SoW as a precursor to and key source of input for the formal project charter.
Since the project manager drafts the charter during the project initiation phase, you could also refer to the charter as a brief or project initiation document (abbreviated as PID; for more on this, you can read our expert article on project initiation documents).
If the project charter is approved, the project moves into the planning phase.
Whereas the project charter explains the “what” and “why” of a project, the project plan describes the “how.” Similar to how the project charter builds on the SoW, the project plan builds on the project charter.
A project plan explains how you will manage the various aspects of a project, including risk, the project schedule, communications, etc.
Why is the Project Charter so Important?
We’ve touched briefly on how a good project charter should start off your project and keep it on track. Let’s consider this more in-depth, from the perspectives of each party involved:
Benefits for Project Managers & Teams
- Articulates project value proposition: helps you determine if it’s worthwhile to carry out the project
- Saves time down the road: the time you take to clarify objectives at the beginning of a project is time you won’t need to spend troubleshooting and negotiating later in the project life cycle
- Clarifies the budget: ensures that funding is available and will be released on time. Settling your spending authority and budgets saves time prior to starting the project.
- Sets clear guidelines for your project team: defining success criteria is invaluable for guiding the team as you begin to brief out the project
- Boosts team morale: a team working under a sloppy charter will repeatedly find themselves confused, with their hard work wasted or headed in the wrong direction. A well-written charter gives metrics for success that your team can feel motivated and confident to work toward.
Benefits for Clients & Other Stakeholders
- Creates a shared understanding: stakeholders know what to expect and what constraints the project faces
- Serves as a marketing tool: the project charter can function as a sales document to justify new or existing investments.
10 Elements to Include in a Project Charter
One of the core characteristics of a good project charter is clarity. After reading it, everyone should have a clear idea of what the project entails.
The image and accompanying section outline the elements of a solid project charter:
- Introduction: explains the purpose of the charter and provides the project name
- Business case and scope statement: explains the purpose of the project (including business drivers and any related projects), defines high-level activities that are part of the scope of the project, and covers the expected return on investment
- Success criteria: defines what success looks like and how the team will measure success
- Major requirements or deliverables: summarizes high-level requirements and/or key project deliverables
- Budget: estimates project costs, ideally by project phase, and defines sources of project funding
- Milestone schedule: estimates project duration and summarizes major project phases and milestones
- Assumptions and constraints: identifies known and unknown parameters upon project initiation
- Project risks: summarizes major known threats or opportunities that may affect project success
- Team and organization: defines project roles and responsibilities
- Approvals: includes a space for stakeholders to record their approval (or disapproval) of the charter.
In addition to these project charter sections, you may also include an appendix with documents such as:
- List of deliverables: if deliverables are already defined, this list contains details about each deliverable—what it is and the associated acceptance criteria
- Scheduling documents: project timeline, calendar, or other documents that sequence project activities and include details about each project milestone or phase
- Communication plan: this includes details about how each person involved will be kept informed about progress, changes, etc. (For more information, here’s a guide on how to create a communication plan.)
The Project Management Institute’s Guide to the Project Management Body of Knowledge (PMBOK) is a good reference for more information about each of these elements.
How to Write a Project Charter
There’s no single right way to write a project management charter, but here is a basic process you could consider:
1. Discuss With Stakeholders & Team
Gather information about the project by meeting with key stakeholders, including the project manager, sponsors, clients, and representative team members. Don’t forget that stakeholders may also include other teams that provide specialized support, such as network capacity and security experts.
2. Take & Organize Notes
In your discussions, ask questions and take notes that help you to fill out each of the sections of your charter. Use your time wisely to collect the most salient information; you can always fill in the supporting details later on.
3. Use A Template
Take advantage of the myriad project charter templates available online to create the format that best serves your project needs. DPM Members can use our pre-made charter template, along with a bunch of other time-saving resources. Alternatively, you could use one of the sample project charters in this post as a starting point.
Or, if you want to build your own charter from scratch, you can work through this detailed guide from the Treasury Board of Canada, line-by-line.
4. Include Specific Information
Let’s start with a bad example. For a banking client, a project manager writes the project goal statement in the charter as “improve communication channels.” Yes, good communication is a worthy goal, but the way this is written leaves a lot to the imagination:
- Whose communication channels will be improved? Customers? Internal staff?
- How many users’ needs are we trying to address?
- Will we be updating an existing system or building a completely new system?
- When will it be completed?
- Does the scope extend to training on the new communication tool?
- Will the contract include any ongoing support for the system?
A complete charter would provide clear, specific information on these questions so that the reader can understand the project purpose. Here’s a better example:
“Create a new communication system to replace ABC system by December 2019, so that customers can chat with their product managers via XYZ bank’s proprietary mobile apps. Train 400 employees to maintain and support the system in-house.”
Of course, this is only the goal statement, not the entire charter. Yet, this example showcases the difference between a sloppily written and a thoughtfully written charter. Apply similar logic to craft other sections of the charter. The goal of this exercise is for the project sponsor to have sufficient information to be able to approve the project.
5. Review With Team Representatives
After drafting a project charter but before reviewing it with a client, set aside time to review the charter with key members of your team to assess accuracy and completeness.
6. Present For Approval
Notice that this step is not “send for approval.” The project charter is the key to getting approval to undertake the project, and it’s important that it’s presented properly. Avoid simply attaching your charter as a PDF in an email, only to be ignored or dismissed out of hand.
Instead, present your charter to your sponsors, stakeholders, or clients—do this in a meeting or through a slide presentation that includes supporting media. Make sure you leave sufficient time for questions and answers.
Project Charter Examples
Because the format of a project charter should adapt to project objectives and proposed scope, it is worthwhile to consider different examples. Here are three different versions of project charters to consider:
Best Practices for Creating a Project Charter
When creating a project charter, keep in mind these best practices:
- Keep it simple. Your project charter should leave no room for interpretation. A layperson with no knowledge of the project or your organization should be able to pick up the document and understand what’s going on.
- Big picture over details. Provide a high level overview of the project purpose and outcomes, and avoid getting bogged down in unnecessary details that hinder alignment or create accountability problems later on.
- Create consensus. You could draft the most eloquent project charter on the planet, but it serves no purpose if stakeholders aren’t willing to agree to it. Remember that the project charter is a tool that supports stakeholder alignment. If your charter doesn’t bring stakeholders together, there’s no point in writing one.
Looking For More?
Now that you’ve completed your project charter, you’re ready to craft your project plan and other supporting PM documents. If you’re unsure where to begin, save time with 90+ action-ready templates and samples by becoming a DPM member. Join the collective. Find your people.
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