Menu Close

What is Project Charter? Project Charter Example and Template


Managing complex projects can be quite chaotic if a systematic procedure is not followed. Bigger projects need a robust plan in action to avoid such issues. This necessitated the need for project charters in large enterprises. This document assists all stakeholders to understand the purpose of the project and its scope. Project charters are usually signed by the project sponsor or initiator. Besides the specifications of the project, the charter also contains a list of key personnel involved in the project.

What is Project Charter?

Project Charter is a document that is formulated with all the key information and approvals necessary for the new project undertaken. As per the PMBOK Guide project charter is considered as the first deliverable which is circulated among all stakeholders before commencing the project. The components present in the document may vary based on its complexities.

Components of Project Charter:

  • Business case:

In this section, the project sponsor briefly describes what the project is all about and the name of the project. Along with this a project sponsor is also required to specify the objectives of the project. The most crucial part of the business case is to identify how the project objectives align with the business strategies.

  • Project purpose:

The project purpose elaborates as to why the project is undertaken by the business. This helps the project team as well as the stakeholders to understand what task has to be performed and why it has to be performed by specific personnel.

  • Project deliverables:

Here, the end results that are to be received by the client are mentioned. Based on the requirements specified by the customer, project sponsors establish the outcomes which have to be delivered on completion of the project. It can be one single item or a list of end results.

  • Project constraints and assumptions:

A project sponsor specifies the constraints and high-level assumptions involved in carrying out the tasks of a project. In simple terms, this section consists of a description of known and unknown parameters of the project. However, certain assumptions are made based on high-level historical data.

  • Project benefits:

Here the project sponsor is required to state a list of benefits that the organization will attain on initiating this project. The top-level management along with the project team needs to know how the project is benefitting the organization. This helps to motivate the project team and achieve the desired project success rate.

  • Project risks:

All the potential high-level risks arising out of the project need to be listed here. Such risks can impact the business functions to a great extent. As a result, stating these risks helps to derive a proper solution to mitigate them as and when they arise.

  • Project budget:

The total cost of the project is specified here. Based on the high-level budget, several quantifiable measures can be chosen to evaluate the performance of the project. Setting the budget prevents the project team from going overboard in using resources. Thereafter, as and when costs are incurred, they are recorded and tracked.

  • Milestone schedule:

The tentative dates on which certain deliverable has to be completed is specified here. The project team has to ensure that all their respective tasks are completed as per the schedule to meet these milestones.

  • Project acceptance criteria:

This section consists of the conditions that have to be met before the project is considered complete. It is important to clearly define the criteria and get it approved by clients. Also, the criteria should in simple terms that clients can understand.

  • Project exit criteria:

In this section, sponsors are entitled to list the performance metrics and measurements. During the evaluation of the project, if these metrics are met, then the project is deemed to be complete.

  • Stakeholder list:

The list of stakeholders who are directly involved in the project is listed here. Along with stakeholders the team responsible for handling the project and their responsibilities are listed under this section.

  • Signatures:

In this section, the project sponsor/initiator/client needs to approve the document by placing their signature. Without this approval, a project cannot be initiated by the project team. The initiation phase of the project cannot take place without the signatures of the initiator or sponsor.

Why do we need a Project Charter?

Project Charters are written whenever a business undertakes a new project. Several businesses consider this document as the most crucial part of a project. This document contains all the key elements that are required to carry out the tasks of a project. As a result, project charters are signed by the sponsors. In simple terms, project charters are documents that are used to communicate with stakeholders and obtain their approval for carrying out projects.

Businesses benefit from project charters that can be used to align the objective of the project with that of the organization. It is the single most document that gives authority to the project manager to initiate a project. Without this document, stakeholders associated with a project will never be able to determine why the project was undertaken. As a result, modern businesses ensure that project charters are drawn and approved before starting a project officially.  

Example of a Project Charter

ABC company Project Charter

Project Name: Setting up a payment page for website

Project Description: Designing a payment page for the website with all the necessary payment options. Instilling a robust security system for payment options

Business case: Supports the following objectives of the company:

  1. Increasing revenues by 20%
  2. Retain customers through a frequent buyer program

Project purpose: The purpose of this project is to include a payment page on the website with proper security protocols.

Project deliverables:

  • Design of the payment page
  • A file containing confidential information on the installation of the payment page.

Project constraints and assumptions:

  • Constraint: Resource limitations to design the payment page on website
  • Assumption: client requirements won’t change

Project benefits:

  • Enhanced reputation
  • Expansion of website designing boundaries

Project risks:

  • The payment page can be prone to hacks
  • Confidential website information can be leaked.

Project budget:

The budget of the project is set at $5000

Milestone schedule:

  • Prototype of the payment page on website: 30th August 2021
  • Installation of the page on website: 30th September 2021

Success criteria:

  • Project is completed within the schedule
  • Project is completed within the set budget

Exit criteria:

  • The payment page has passed the security test


Project team-

  • Designer- Mark J
  • Coder- Scott B
  • Project Manager- Benjamin


Project Sponsor- Alan, CEO of ABC company


In the present era, project management professionals or PMP Certified project managers make use of various tools to develop such project charters. PMP Certification holders master the art of designing project charters through PMP Training course. There are a wide range of templates available for preparing the charter. This way organizations can reduce the time taken to carry out the activities in the planning phase. Hence, Project Charters are considered vital to the process of managing projects.

Posted in Project Management

Related Articles