What Is a Project Charter? (And Why You Should Use One)

By Indeed Editorial Team

Updated August 26, 2022 | Published November 16, 2021

Updated August 26, 2022

Published November 16, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Project managers use a variety of tools and documents to organize their projects and share information with stakeholders. A project charter summarizes the direction and elements of a project that stakeholders and team members can use as a reference. Understanding the functions of a project charter can help you implement one in the next project you manage. In this article, we explain what project charters are, discuss why they're important and provide tips for using them effectively.

Related: How To Create a Project Charter Step by Step (Plus Tips and Examples)

What is a project charter?

A project charter is a concise document written by project managers that serves as a guide for a project. Creating this document is an integral part of project planning. The purpose of creating a project charter is to explain the primary goal of a project. The charter also outlines the project objectives, resources, budget and any potential challenges and rewards for stakeholders. You can use the project charter as a reference throughout the project timeline. Here are some questions that a project charter can address:

  • Why are you taking on this project?

  • What are the objectives of this project?

  • What are the possible limitations and solutions of the project?

  • Who are your stakeholders or clients?

  • What's the timeline of the project? The start and end date?

  • What's the budget for the project?

  • What's needed to accomplish the project?

  • What are the benefits of the project?

  • How are you going to measure the progress of the project?

  • How are you going to measure the success of the project after it's concluded?

  • Who are the team members working on the project? Are they going to require any training?

Related: How To Write a Project Charter

Who can use a project charter?

There are several people who can use a project charter, including project managers, external customers, team members and other stakeholders. Project managers can use the stakeholder to summarize a project and share it with investors or executives. A project charter is also useful for team members, who can use it to understand the project goals, the resources they're going to use and what they're supposed to be doing and when.

External stakeholders can use a project charter to determine if a project is going to meet their goals and expectations before the project begins. This way, they can tell project managers that they want something changed before the team members start. Stakeholders can also use a charter as a reference when checking in with project managers for an update.

Related: Project Charter vs. Project Plan: What's the Difference?

Why use a project charter?

There are many reasons to use a project charter, including:

Project authorization

A project charter is the first formal document to outline your project so everyone involved can begin working on it. This document reads like an elevator pitch. It's simple and brief, and its primary goal is to sell your project to stakeholders. Once stakeholders authorize a project, the project managers can begin working towards completing their goals. The charter is also a way for project managers to get their resources for the completion of the project.

Related: Elevator Pitch Tip: Keep It Concise

In this video, Jenn, a career coach at Indeed, presents the key to keeping your elevator pitch the right length, which will help capture and maintain the full attention of the people you’re pitching to.

Understand client's needs and requirements

Being able to summarize your client's needs into a brief document can show that you understand them. Knowing what your clients want can help you build a better relationship with them. Creating a project charter can show that you're taking their requests seriously and working to ensure that you complete the project to their standards. The client can also use the project charter as a progress tracker.

Serves as a sales document

A project charter can also serve as a sales document for stakeholders, similar to a proof of purchase. The stakeholders can keep their own copies of the charter to review, and they can make requests to the project managers for any changes they may desire. Stakeholders can also reference the charter if they have questions regarding the budget, resources or general direction of the project.

Related: 10 Important Project Management Topics and Tips for Using Them

Tips for using a project charter

Here are some tips you can use when creating a project charter:

  • Create a template. Creating a template you can easily use and edit for future project charters can help streamline the process in the future. You can create your own template from scratch, or you can customize pre-made templates to match your organization's branding and project requirements.

  • Ask your team for their suggestions. Asking your team what they think is helpful to include in the project charter can be useful to keep everyone engaged. The project directly involves your team in creating the assignment, so they may have helpful insight on how to improve the project and what elements to include in the charter.

  • Share the document. Sharing the document through document sharing applications can allow team members and stakeholders to review it whenever they want. There are many software tools project managers can use to share project documents.

  • Keep it short and direct. The goal of a project charter is to keep it concise, including all the information needed for everyone involved, as it's an overview rather than a detailed explanation. It's helpful to keep each section at a maximum of two sentences and use bullet points, as this can make the document more readable.

  • Make it visual. Adding visuals, such as photos or illustrations, can help make the document easier to read. It can also help readers remember key points of the document they might want to reference later.

  • Use Gantt charts. Many project managers use Gantt charts to help their team members track their progress and stay on schedule. With these charts, you can set specific team members to certain tasks and set deadlines for each task so the project can finish on time.

Related: How To Finish Your Elevator Pitch

Jenn, a career coach at Indeed, describes a critical component of an elevator pitch: the call to action. Learn how to end your story with a pitch!

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