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What is Project Charter? Project Charter Example and Template


Managing complex projects can be chaotic if a systematic procedure is not followed. Bigger projects need a robust plan of action to avoid such issues. This necessitated the need for project charters in large enterprises. This document assists all stakeholders in understanding the purpose of the project and its scope. The project sponsor or initiator usually signs project charters. 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 formulated with all the key information and approvals necessary for the new project. The PMBOK Guide considers the project charter the first deliverable, circulated among all stakeholders before commencing the project. The components present in the document may vary based on their 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 project’s objectives. The business case’s most crucial part is identifying how the project objectives align with the business strategies.

  • Project purpose:

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

  • Project deliverables:

Here, the results that are to be received by the client are mentioned. Based on the requirements specified by the customer, project sponsors establish the outcomes that must be delivered upon project completion. It can be one single item or a list of 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 must state a list of benefits the organization will attain on initiating this project. The top-level management and the project team need to know how the project benefits 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 from the project must be listed here. Such risks can impact 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 project’s performance. Setting the budget prevents the project team from going overboard in using resources. After that, they are recorded and tracked as and when costs are incurred.

  • Milestone schedule:

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

  • Project acceptance criteria:

This section consists of the conditions to be met before the project is considered complete. It is important to define the criteria and get them approved by clients. Also, the criteria should be 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 project evaluation, if these metrics are met, then the project is deemed to be complete.

  • Stakeholder list:

The list of stakeholders directly involved in the project is 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 must approve the document by placing their signature. Without this approval, the project team cannot initiate a project. 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 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 used to communicate with stakeholders and obtain their approval for projects.

Businesses benefit from project charters that can be used to align the project’s objective with that of the organization. It is the single document that gives the project manager authority 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 the 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: This project aims 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 designing the payment page on the website
  • Assumption: client requirements won’t change

Project benefits:

  • Enhanced reputation
  • Expansion of website design 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 the website: 30th August 2021
  • Installation of the page on the website: 30th September 2021

Success criteria:

  • The project is completed within the schedule.
  • The 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 use various tools to develop such project charters. PMP Certification holders master designing project charters through PMP Training courses. There is 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

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