Project Charter: Purpose, Components, Template and Example
A project charter formally authorises a project and establishes its purpose, high-level boundaries, success criteria and decision authority before detailed planning begins.
Different departments may support the same initiative while holding different assumptions about the business need, project boundaries, expected outcomes or who has authority to make key decisions.
Without that alignment, detailed planning can begin on unstable ground and disagreements surface later as scope, priorities and approvals collide.
In project management, a project charter creates the formal bridge between an approved business need and detailed project planning by establishing purpose, boundaries, authority and initial direction.
This LOTC guide explains what a charter should establish, how to write one without turning it into a full project plan, and how to apply a practical template and completed example.
What Is a Project Charter in Project Management?
A project charter in project management establishes the project at a high level before detailed planning begins. It records why the project exists, the outcomes it is expected to achieve, its initial boundaries, key stakeholders and the authority needed to move from an approved idea into structured delivery.
A strong charter normally identifies the sponsor and project manager, sets high-level objectives and constraints, and confirms who has authority to make or escalate key decisions. Its project charter purpose is therefore not simply to describe the project, but to create a shared basis for starting it.
Approval is part of that meaning. A project manager may help prepare the document, but cannot authorise the project by approving their own work. Formal authority must come from the project initiator, sponsor or another body with the appropriate organisational mandate.
This aligns with PMI guidance on project charters, which describes the charter as a document issued by the initiator or sponsor that formally authorises the project and gives the project manager authority to apply organisational resources.
What Should a Project Charter Include?
A useful project charter should establish enough information for the sponsor and project team to agree on why the project exists, what it is expected to achieve and where initial authority and boundaries sit. It should guide the start of planning without trying to replace the detailed plans that follow.
Project Charter Component | What It Should Establish |
Business need / purpose | Why the project should exist and what problem or opportunity it addresses |
Objectives | The measurable outcomes the project is expected to achieve |
High-level scope | What is included, excluded or still subject to clarification |
Key deliverables | The major outputs expected from the project |
Success criteria | How the sponsor will judge whether the project has delivered the intended result |
High-level milestones | Major approval, decision or delivery points |
Budget / resource boundaries | Initial funding limits, resource assumptions or constraints |
Key assumptions, risks and constraints | Conditions that may materially affect feasibility or delivery |
Key stakeholders | Parties with significant influence, authority or exposure to the project |
Project manager and authority | What the project manager is authorised to coordinate, decide or escalate |
Sponsor / approvals | Who authorises the project and provides executive support |
The project charter format should remain deliberately high-level. Detailed activity schedules, a full risk register, complete work breakdown structure, communication plan and every stakeholder requirement belong in subsequent planning documents.
At this stage, the charter should identify the stakeholders who matter most; detailed engagement analysis can then continue through a stakeholder management process as planning develops.
How to Create a Project Charter That Can Guide the Project
Create the project charter around the decisions that must be clear before detailed planning begins. A strong charter does not describe every activity; it establishes why the project exists, what it must achieve, where its boundaries sit and who has authority to move it forward.
1. Start with the Business Need and Sponsor
Begin with the problem, opportunity or strategic requirement that justifies the project. Summarise why it deserves investment and identify the sponsor or initiating authority behind it.
The charter should capture the essential case for action without repeating the full business case. It should also make clear what decision authorised the project to proceed.
2. Define Outcomes Before Activities
Write objectives and success criteria around results, not vague intentions.
Avoid:
Improve customer experience.
Use something testable:
Implement a single CRM platform for customer service teams by Q4 and migrate validated active customer records before go-live.
This keeps the project charter purpose focused on the outcome the organisation expects, rather than an early list of tasks.
3. Set High-Level Boundaries
Define what is in scope, what is outside scope, the major deliverables, important assumptions and known constraints.
Keep this level deliberately broad. The charter establishes the boundaries; the work breakdown structure later decomposes approved deliverables into manageable work packages.
4. Clarify Authority and Escalation
Do more than name the sponsor and project manager. State:
What the project manager can decide directly
- Which changes require sponsor approval
- What resource or budget limits apply
Where issues beyond the project manager’s authority should be escalated
A charter without a clear mandate can leave the project manager responsible for delivery but unable to resolve the decisions that shape it.
5. Validate and Approve Before Detailed Planning
Review the draft with the sponsor and key stakeholders. Confirm that the business need, objectives, scope boundaries, success criteria and authority are understood in the same way.
Once the appropriate authority approves the charter, move into detailed project planning. At that point, the team can build schedules, budgets, risk responses and detailed delivery plans from an agreed foundation.
Copyable Project Charter Template
Use this project charter template to capture the minimum information needed to authorise a project and create a stable basis for detailed planning. Adapt the wording to your organisation, but keep the document focused on high-level decisions rather than operational detail.
Field | What to Complete |
Project title | Clear and recognisable project name |
Sponsor | Person or authority authorising and supporting the project |
Project manager | Person responsible for leading delivery |
Business need | Problem, opportunity or strategic requirement being addressed |
Project objectives | Specific outcomes the project is expected to achieve |
In scope | High-level work and outcomes included |
Out of scope | Explicit boundaries that prevent later ambiguity |
Key deliverables | Major outputs the project must produce |
Success criteria | Evidence the sponsor will use to judge the intended result |
Major milestones | Significant approval, decision or delivery points |
Budget / resource limits | Approved boundaries, assumptions or constraints |
Key risks / constraints | Major known conditions that could affect delivery |
PM authority | Decisions, resources or actions the project manager can control |
Escalation / approval | Matters requiring sponsor or governance-level involvement |
Approval | Sponsor approval, date and formal sign-off method |
Copy this project charter format into Word, Google Docs or your organisation’s project-management system and expand only the fields your governance requires.
Do not add a detailed activity schedule, task-by-task ownership or a complete risk register simply to make the charter look comprehensive. Those belong in the planning documents that follow.
A strong project charter sample should remain concise enough to support an authorisation decision, while containing enough clarity to prevent the team from starting detailed planning on conflicting assumptions.
A Completed Project Charter Example
Use this project charter example to see how the document creates agreement on purpose, boundaries and authority before the project team develops detailed plans.
CRM Implementation Project
Field | Example |
Project | Customer Service CRM Implementation |
Sponsor | Operations Director |
Project Manager | CRM Project Manager |
Business need | Customer information is fragmented across several systems, creating duplicate handling, inconsistent records and slower service |
Objective | Implement a single CRM platform and migrate validated active customer records before Q4 go-live, creating a single reliable customer record for service teams and reducing duplicate handling. |
In scope | CRM configuration, approved integrations, data cleansing and migration, testing, user training and go-live preparation |
Out of scope | Replacement of finance, ERP or unrelated operational systems |
Success criteria | Approved CRM live by the target date; agreed data-quality threshold achieved; required users trained; customer-service teams using a single validated customer record; measurable reduction in duplicate handling after implementation |
Major milestones | Design approval → configuration → migration and testing → readiness approval → go-live |
Key risks / constraints | Poor source-data quality, integration delays, limited subject-matter availability and user adoption |
PM authority | Coordinate assigned resources and make routine delivery decisions within approved scope, budget and governance limits |
Sponsor approval required | Material scope changes, additional funding, major timeline changes or decisions affecting strategic objectives |
This project charter sample deliberately avoids listing every activity. Its value lies in creating agreement before detail: the organisation has defined why the project exists, what success should look like, where the boundaries sit and which decisions belong to the project manager or sponsor.
From this approved project management charter, the team can then develop the WBS, detailed schedule, risk register, communication plan and budget. Those documents add planning depth; they should not be used to compensate for an unclear charter.
Project Charter vs Project Management Plan
The difference between a project charter and a project management plan is mainly one of purpose, timing and authority. The charter establishes why the project exists and gives it formal direction; the project management plan defines how that authorised project will actually be managed.
Area | Project Charter | Project Management Plan |
Purpose | Authorises and frames the project | Defines how the project will be managed |
Timing | Developed during initiation | Developed during detailed planning |
Level of detail | High-level | Detailed and integrated |
Focus | Why, what, authority and boundaries | How, when, who and control |
Approval | Sponsor or authorising authority | Approved according to project governance arrangements |
Typical content | Objectives, high-level scope, sponsor, authority and major constraints | Scope, schedule, cost, risk, communications and control approaches |
The charter should not become a miniature project plan. Its job is to establish the initial mandate and boundaries clearly enough for planning to proceed.
Equally, a detailed plan cannot replace formal authorisation. The project charter gives the project permission and direction; the project management plan turns that direction into an executable management approach. PMI similarly separates project initiation, including charter development, from the detailed planning that follows.
Common Project Charter Mistakes
Check the project charter before detailed planning begins, because weaknesses at initiation usually reappear later as scope disputes, approval delays or conflicting expectations.
Common mistakes include:
Writing the charter after detailed planning is already under way
- Copying the business case instead of extracting the project’s purpose and mandate
- Filling the charter with detailed activities, schedules and operational plans
- Using vague objectives such as “improve performance” without a testable outcome
- Defining what is in scope without making important exclusions clear
- Naming a project manager without defining their authority
- Treating “project completed” as success instead of specifying the outcomes that matter
- Relying on informal agreement without formal authorisation
Ignoring the charter when major scope, strategic or authority questions emerge later
A useful quality test is simple: if the sponsor, project manager and core team cannot read the charter and reach the same understanding of why the project exists, what it must achieve and where its boundaries and authority lie, the charter is not doing its job.
A strong charter does not predict every detail of a project; it ensures that detailed planning begins from an authorised and shared understanding of what the project is meant to achieve.
Strengthen Project Initiation and Planning with LOTC
Strong project initiation depends on more than completing a project charter. Writing the charter is only the starting point. Teams must then turn its objectives, boundaries and authority into stakeholder decisions, a workable WBS and an integrated project plan.
LOTC develops these capabilities through:
Comprehensive Guide to Project Management, covering project charters, business cases, stakeholder analysis, WBS development and integrated project planning.
Project Management Fundamentals, building practical capability across initiation, scope, stakeholders, planning, scheduling and project control.
LOTC can also tailor corporate training around your organisation’s governance, projects and delivery challenges. Speak to the LOTC team on WhatsApp to discuss the right programme.
