How to Create a Project Charter [Free Template]

One of the first charters was used in Canada, back in 1670. King Charles II signed it, formally authorizing the Hudson’s Bay Company’s existence and giving them the monopoly on trading rights in the entire Hudson Bay. The Royal Charter, as it is referred to today, defined key details pertaining to the establishment of the company, such as its purpose, objectives, resources, governance, and stakeholder expectations.

Project charters are used for essentially the same purpose even today. They are among the first documents created during the initial planning stages of a project. A project charter provides a high-level overview of all its important details and acts as a baseline for execution. 

Here is a simple guide on how you can create a project charter for your project.

What is a project charter?

A project charter is a short and formal document that outlines all the essential details of the project: objectives, scope, stakeholders, etc. It is created at the start of a project’s planning stage, after the Statement of Work, and just before the kick-off. Once approved, the charter gives the project manager the authority to use company resources to attain the project objectives and complete them.  

The project charter document may seem like just another document in the list of documents you will be required to make for your project. However, it's one of the most important ones as it outlines the entirety of the project and ensures that everyone involved is held accountable and is on the same page about the details. Hence, it is best not to skip this step.

Why do you need a project charter?

The project charter typically serves the following purposes:

1. Laying out of the project scope and its objectives

A project charter is used to introduce team members to a new project that is in its early stages. It is also a great way to get new members up to speed about the project as they come in. All that they need to know about the project will be present in the charter.

2. Reaching an agreement with all stakeholders

Different members within the team can have different views about the project. The project charter ensures that everyone is on the same page regarding the most critical aspects of the project, such as the objective, scope, budget, etc., so you can avoid any confusion later.

3. Formalizing project approval

The final draft of the project charter is sent out to the authorized signatories to communicate the project’s intent and give them an idea of how you and your team will achieve the objectives. After they approve it, the project manager is authorized for project kickoff.

How do project charters, SOWs, and project proposals differ from each other?

The project charter, statement of work (SOW), and project proposal are very similar yet different documents. They include similar topics and components, but their focus and content are different. A project proposal is a document created during the project’s initiation phase and persuades stakeholders on its feasibility.

The SOW provides detailed information about all the deliverables that are part of the project and the organization’s approach to completing them. The project charter is created during the planning phase and is based on the SOW. It authorizes the project manager to kick off the project and use the allocated budget and other resources to achieve project objectives.

What constitutes a project charter?

Here are some of the critical pieces of information that your project charter document must contain:

1. Project description

Typically one or two short paragraphs that explain the project, it needs to be concise and to the point.

2. Project scope

It must describe, on a high level, all the attributes of the end product. It is also important to briefly explain define the project’s boundaries and the actions that you and your project team will take. For example, whether your project team will carry out product testing, marketing, etc. should be defined.

At this point, to avoid any confusion in later stages, you can also detail out the actions that you and your team will not be taking—this could be a separate section titled “out of scope,” or you could include it under the scope section of the document. 

3. Objectives

Your objectives need to be clearly defined and measurable. Avoid being generic as you should prove that you have achieved the goals, and be accurate. Make sure to be detailed and give numbers. For example, “increase sales by 25% by 15th December 2021”.

4. Key deliverables

It is good practice to list out the project team’s key deliverables. This way, the team will know what to expect from the beginning and plan for it. You can also include information on how you plan on measuring the project’s success and how you will determine if the project goals have been met.

5. Milestones

This is a schedule of events with tentative start and end dates. It shows when you expect to complete each stage of the project. This schedule can provide a general understanding of the timeline that the team is working with, which in turn will help them plan the execution of the deliverables.

6. Budget

This section needs to list out the one-time cost that needs to be paid out in addition to any other ongoing costs or maintenance that the organization must be aware of. 

It gives the team an idea of the budget that they’re working with.

7. Assumptions

List out the factors, conditions, or situations that you and your project team are depending on to achieve the objectives and goals of the project. This section primarily talks about resources and schedule, as you may have to make assumptions regarding the two and other forms of team member support available to you.

8. Risks  and constraints

This refers to anything that can get in the way of your team delivering on the project’s objectives. It could be external or internal factors that impact certain aspects of the project. For example, integration with a new platform and timelines associated with it could be listed as a risk since it can potentially cause delays in delivering within the given timeline. 

9. Governance/team members

List the project manager, sponsor, and all team members along with their roles and responsibilities here. If your team is huge, you could limit the list to the names of team leads. This section should give enough information so that people know who to reach out to for their queries and dependencies.

10. Approvals

Finally, include a section for approvers to sign and authorize the project. Usually, the primary authorizer is the project sponsor. However, many organizations may include the approval of the project manager and other higher management officials. Once the project is approved, it authorizes the project manager to use the assigned budget and other resources to start the project.

These details are sufficient to create a comprehensive project charter that can fit any business. 

Best practices for writing a project charter 

Here are a few things to keep in mind while creating a project charter:

1. Create the project charter as early as possible

Different individuals in the team will have different perspectives, so it’s best to set expectations and align everyone’s views by avoiding delays and drafting the charter as soon as you have been assigned a project.

2. Keep it short

Since a project charter is created very early on in the project lifecycle, it is not meant to be a detailed document. Ideally, it should only briefly describe the project and the proposed solution. Think of it as a marketing tool that you will be using to sell the project and the proposed plan to its approvers.

Keep only the necessary information so that it is easy for people to read and understand the gist of the project. A charter must be only five pages or less—people should be able to read it in a few minutes.

3. Make it visually appealing

Since you want people to read your document quickly, having a wall of text and large paragraphs will not help. To make your document visually appealing, include different design elements such as images, boxes, sections, and tables to separate various components of the document. If you want to keep it simple, make sure to include clear, accented headings with concise points under each section so that it is easier for people to read and refer back to later.

4. Make the project charter planning process a team effort

The best way to create a charter is in collaboration with the entire team and the stakeholders. When the whole team gets together and discusses the various aspects of the project charter, they will bring different perspectives and approaches to the table and begin to align their thinking. The next time you need to draft a project charter, try not to do it by yourself and make it a team effort!

5. Use a template

To speed up drafting a project charter, it is a good idea to use a template but don’t just copy-paste anything you find! Make sure that it fits your business or is in an editable format so that you can make the necessary changes. 

Free Download: Project Charter Template

6. Collect your team's feedback

Once you have all the necessary information, send a rough draft to your team. Your team members could make suggestions or highlight things you need to include to make the project charter comprehensive. Once you have reviewed and accommodated this feedback, the completed document can be sent for approval.

Like every other project document, a project charter can also differ from business to business. But the most basic components remain the same across the board.

Mistakes to avoid

Here are some common mistakes that you must avoid while creating your project charter template.

1. A project charter that is too detailed and in-depth

Giving too many and in-depth details is a common mistake that many organizations make. Some companies are even known to have project charter documents that are nearly 50 pages long with several subsections under each section. It is best to refrain from doing this because people will end up not reading the document, and that’s something you don’t want!  A project charter is meant to be short and concise, so keep it that way. 

2. Repetition

Another common issue that can be found in some charter documents is that information is sometimes repeated and presented under different sections. For example, risks and constraints are sometimes given as two separate sections with pretty much the same information. This can be avoided. You could add both under one section unless your project requires it to be called out separately.

3. Including status details

While looking up project charter templates online, you may notice that some have details related to project status in them. This information does not belong in a project charter and should ideally not be included. A project charter document is not meant to be updated constantly, or each time a deliverable or milestone is achieved. It is only meant to give the team an idea of the timeline they’re working with.  

Project Charter Template

Here is a project charter template that you can use effectively for any project. You can add more information to the template depending on what is crucial to your specific project and business. However, while drafting the project charter, try to use the ‘SMART method,’ i.e., ensure that your goals are specific, measurable, attainable, relevant, and timely.

More resources

1. Project Management Basics: Risk Management
2. Project Management Basics: Innovation Management
3. Getting to the root cause of problems in project management
4. 10 Project Management Tools You Can Use for Customer Onboarding
5. Customer onboarding templates for every stage of your onboarding journey