What Is a Project Charter and How to Use It in Projects

A project charter is the first real test of whether a project will succeed. It captures the mission, goals, scope, and responsibilities in a form that everyone involved can commit to. Without it, projects often drift into scope creep, unclear ownership, and misaligned expectations.

The value of getting this step right is measurable. According to the Project Management Institute, poor requirements management costs organizations an average of 5.1% of project spend each year, often because teams start execution before goals and constraints are agreed upon. Charters directly address this weakness by forcing early clarity. 

This article explains what a project charter is, the key elements to include, and how to write one that holds up under pressure. It also looks at how the charter differs from a project plan, and how organizations in different fields—from IT to construction—put it to use. Finally, it connects the document to practical execution tools inside Microsoft 365, showing how Gantt charts, Kanban boards, and shared calendars can keep the commitments of the charter visible throughout delivery.

What Is a Project Charter?

This section explains what a project charter is, why it matters, and the core functions it serves—clarifying goals, ensuring transparency, and assigning accountability before any real work begins.

Project charter definition: What is project charter? 

A project charter is the document that gives a project its official start. It’s approved by the project sponsor and defines the purpose, scope, key objectives, resources, and responsibilities. In practical terms, the charter is what authorizes the project manager to use organizational resources to deliver the agreed outcomes.

Its role is to provide a shared understanding of what is being done and why. The charter typically answers questions such as: 

• What problem is this project solving? 
• What are the high-level objectives? 
• Who is responsible for delivery? 
• What limits—budget, time, or scope—must be respected?

Beyond its administrative function, the charter plays a critical part in project success. Research from the Project Management Institute shows that 52% of projects experience scope creep—uncontrolled expansion of work—when early definition is weak. The charter is designed to prevent this by clarifying objectives, assigning decision rights, and recording constraints before execution begins.

Studies on capital projects underline the same point. The Construction Industry Institute (CII) found that projects with strong front-end planning, of which the charter is the anchor, consistently achieve fewer design changes, shorter schedules, and lower final costs. In short, time spent on a clear, well-structured charter pays dividends once delivery is underway.

What is the purpose of a charter?

The purpose of a project charter can be broken down into three main functions:

• Clarifying the mission and goals: A charter defines the project’s mission in plain terms and sets measurable goals that everyone can understand. This upfront clarity prevents the team from pulling in different directions once execution begins. When stakeholders agree on what success looks like before any resources are committed, it becomes much easier to resist distractions or mid-course shifts that aren’t aligned with the original intent.
• Ensuring transparency: Projects often stall or derail because of unclear expectations. The charter provides a single reference that documents commitments, constraints, and key decision points. By spelling these out early, it reduces the risk of later disputes over what was promised, when deliverables are due, or who signed off on a decision. Transparency at this level helps build trust across the project team, sponsors, and external stakeholders.
• Assigning roles and responsibilities: Overlaps in responsibility or gaps in ownership are among the most common sources of friction in projects. The charter addresses this by explicitly stating who owns which deliverables and who has authority to make which decisions. This prevents duplication of effort, minimizes conflict, and shortens escalation paths when issues arise.

By laying these foundations early, the charter serves as more than a kickoff document. It becomes the reference point for every plan, decision, and review—anchoring priorities, timelines, and responsibilities so the project stays aligned with its approved mission.

👉 So, what is a project charter in project management? A project charter document in project management is a formal document that authorizes the project, defines its objectives, scope, and constraints, and grants the project manager the authority to use resources. It serves as the foundation for all subsequent planning and decision-making, ensuring alignment among stakeholders from the very beginning. Without it, projects risk starting without clear direction or accountability.  

Elements of a Project Charter

A project charter only delivers value if it contains the right information. This section outlines the core elements every charter should cover.

What is included in a project charter?

Every project charter follows the same basic pattern: it captures what needs to be achieved, who is responsible, and under what constraints. While formats vary, the strongest charters consistently include the following elements:

• Project title and objectives: A clear title and a concise statement of objectives keep the project easy to reference. Objectives should be SMART—specific, measurable, achievable, relevant, and time-bound.
• Scope and exclusions: Define what the project will deliver, but also what it will not. This is one of the most effective ways to control scope creep. PMI reports that unclear or shifting requirements are among the top causes of project failure, often leading to cost overruns and missed deadlines.
• Resources and budget: Estimate the human, financial, and technical resources required. Even if the figures are high level, committing them in writing helps prevent later disputes over what was “assumed.”
• Timeline and milestones: Provide project start and end dates along with key checkpoints. A study of more than 600 major capital projects found that projects with strong front-end planning—anchored by clear timelines and milestones—achieved 7% shorter schedules and 10% lower costs than those without.
• Roles and responsibilities: Identify the sponsor, project manager, and key team members, along with decision rights. This prevents duplication of effort and helps escalation paths run smoothly.
• Expected deliverables and success criteria: Define what outputs will be delivered and how success will be measured. For example: “a mobile application that supports 10,000 concurrent users with less than 2 seconds average load time.”
• Constraints, assumptions, and risks: List budget caps, compliance requirements, technology dependencies, or other factors that could affect delivery. Risks should include both probability and potential impact, so mitigation can be planned early.

👉 Can I include different project charter elements? Yes, you can include different project charter components, and in fact, tailoring the charter to your organization’s needs is recommended. While common components include objectives, scope, timeline, roles, risks, and success criteria, additional elements such as communication plans or quality standards can be added if they improve clarity. The key is to keep it concise while capturing the commitments and boundaries that will guide the project.

Why these elements matter

NASA and the Construction Industry Institute developed the Project Definition Rating Index (PDRI) to measure the quality of early project definition. Their data shows that projects scoring well in areas such as objectives, risks, and deliverables are significantly more likely to succeed than poorly defined projects. The takeaway: a charter that includes these elements doesn’t just create documentation—it measurably increases the odds of finishing on time and on budget.

A simple template that includes these sections can be applied across industries, from IT implementations to construction and business strategy. What matters most is that each section is specific, agreed upon, and tied to success criteria that can be objectively measured.

Section	Details
Project title	[Provide a clear, descriptive title for the project]
1. Project purpose and background	Business case: Why the project is being undertaken Problem/opportunity statement: What issue is being solved or opportunity pursued
2. Project objectives	Overall goal: One-sentence mission  SMART objectives:  – [Objective 1]  – [Objective 2]  – [Objective 3]
3. Scope	In scope: Deliverables, services, or features included  Out of scope: Items or activities explicitly excluded
4. Deliverables and success criteria	Key deliverables: Tangible outputs (e.g., software release, campaign, new process)  Success criteria/KPIs: Measurable outcomes (e.g., adoption rate, budget compliance, performance benchmarks)
5. Timeline and milestones	Start date: [MM/DD/YYYY]  End date: [MM/DD/YYYY]  Major milestones:  – [Milestone 1 – Target Date]  – [Milestone 2 – Target Date]  – [Milestone 3 – Target Date]
6. Resources and budget	Estimated budget: [High-level figure]  Human resources: Key roles, headcount, skills  Technology/resources: Systems, tools, licenses, facilities
7. Roles and responsibilities	Project sponsor: [Name, role, authority]  Project manager: [Name, responsibilities]  Core team members: [Names, roles]  Stakeholders: [Other interested parties]
8. Risks, assumptions, and constraints	Risks: Top risks with likelihood and impact  Assumptions: Expected conditions  Constraints: Budget, compliance, technology, resource limits
9. Governance and decision-making	Meeting cadence: [e.g., weekly status, monthly steering]  Escalation path: Who to contact if issues arise  Change control process: How scope/timeline/budget changes will be approved
10. Approval	By signing this charter, the sponsor authorizes the project and commits resources. Sponsor name & signature:  __________________ Date: __________________

Project Charter vs Project Plan

The terms “project charter” and “project plan” are sometimes used interchangeably, but they serve very different purposes.

• Purpose: The charter authorizes the project. It defines objectives, high-level scope, constraints, and key roles. The plan, by contrast, explains how those objectives will be achieved. It details the tasks, dependencies, and scheduling needed to reach the goals set in the charter.
• Level of detail: A charter is brief—typically a few pages at most. It provides direction, not step-by-step instructions. A plan can run dozens of pages, outlining schedules, budgets, resourcing, and monitoring processes.
• Timing: The charter is created and approved before the project officially begins. The plan follows, often evolving throughout execution as risks or requirements change.
• Changeability: Charters are meant to remain stable unless the project objectives themselves shift. Plans are dynamic documents, regularly updated as tasks are completed, deadlines move, or resources are reassigned.

This distinction matters because many failures trace back to starting with a plan but no firm charter. Without an agreed charter, even the most detailed plan risks being built on shifting ground. Research from McKinsey and the University of Oxford, based on a review of 5,400 IT projects, found that large IT programs run on average 45% over budget, 7% over time, and deliver 56% less value than anticipated. One of the key causes: inadequate upfront alignment on goals and constraints.

A practical example illustrates the difference:

• A charter might state, “Develop and launch a new e-commerce platform within six months, with a budget of $1.2M, enabling 50,000 users at launch.”
• A plan would then break that into detailed tasks—design phases, sprint schedules, resource allocations, and testing protocols—to ensure delivery within those boundaries.

Put simply, the charter defines the destination. The plan lays out the road to get there. Both are required, but only one— the charter—provides the mandate and high-level alignment that makes the plan possible.

Aspect	Project charter	Project plan
Purpose	Authorizes the project; defines mission, high-level goals, scope, and constraints	Details how the project will be executed to achieve the goals set in the charter
Level of detail	Brief (typically 2–5 pages); focuses on objectives, roles, risks, and boundaries	Detailed (often dozens of pages); includes schedules, dependencies, resource allocation, and monitoring processes
Timing	Created and approved before the project officially begins	Developed after the charter is approved, and evolves during execution
Changeability	Remains stable unless project objectives or scope fundamentally change	Dynamic and updated regularly as tasks, deadlines, or resources shift
Approval	Signed off by sponsor or client to formally authorize the project	Reviewed and updated by project manager and team throughout delivery
Example	“Develop and launch a new e-commerce platform within six months with a $1.2M budget”	Detailed task list and schedule: design sprints, testing phases, resource assignments, contingency planning

How to Write a Project Charter

A project charter should be concise, but it must cover enough ground to give the project a firm foundation. Writing one is a structured process rather than a formality, and the quality of this step has a direct impact on cost, schedule, and delivery outcomes.

How to build a project charter?: Steps to build a strong charter

1. Define the main goal: Start with a clear statement of purpose. This should be no more than a sentence or two. For example: “Launch a mobile e-commerce app capable of supporting 10,000 concurrent users within six months.”
2. Break down objectives into specific tasks: Identify the high-level work streams required to achieve the goal. Examples include design, development, testing, deployment, and marketing. This provides clarity without going into the detailed task list reserved for the project plan.
3. Assign roles and responsibilities: Specify the project sponsor, project manager, and key team members. Clarify ownership of deliverables and escalation paths. Misaligned responsibilities are one of the most common sources of conflict in projects.
4. Estimate time frame and milestones: Document start and end dates, along with key checkpoints such as design completion, testing start, or pilot launch. Studies of capital projects show that strong front-end planning, including milestone definition, leads to 7% faster schedules on average (Construction Industry Institute, Front End Planning).
5. Estimate resources and budget: Include high-level figures for staffing, technology, and financial costs. Even rough estimates force early discussions about feasibility.
6. Define success criteria: State how project success will be measured—on time, on budget, and to quality. Additional criteria could include adoption rates, error thresholds, or customer satisfaction scores.
7. Identify risks and constraints: Record assumptions, dependencies, and potential issues. This helps surface risks early when mitigation is less costly.
8. Secure sponsor approval: The charter has no authority until the project sponsor signs off. This formal approval signals that resources can be committed and the work can begin.

Best practices for writing a charter

• Be concise: Keep the document focused on essentials—objectives, scope, roles, timelines, and risks. Avoid turning it into a detailed schedule or technical plan. Supporting documents such as the project plan, risk register, or technical specifications can carry that level of detail. A concise charter is more likely to be read, understood, and used as a reference by stakeholders.
• Use SMART goals: Goals framed as “improve efficiency” or “deliver better customer service” don’t provide enough direction. Applying the SMART framework—Specific, Measurable, Achievable, Relevant, Time-bound—forces clarity. For example, “reduce average customer service response time from 12 hours to 4 hours within six months” sets a clear target against which success can later be measured.
• Include scope exclusions: Many projects fail not because of what was promised, but because of unspoken assumptions about what was not included. Listing exclusions in the charter, such as “this project will not include mobile app development” or “international rollout is out of scope,” prevents misunderstandings and protects against uncontrolled expansion of work.
• Address change control: Even with the best planning, changes will be requested. The charter should state how changes to objectives, budget, or scope will be reviewed and approved. This avoids informal or unilateral changes that can derail progress. As mentioned previously, organizations lose an average of 5.1% of every project dollar due to poor requirements management—often linked to weak change processes. Including change control guidance in the charter reduces this risk by ensuring a consistent process for evaluating adjustments.

Who writes a project charter?

The project manager usually drafts the charter, often with input from key stakeholders, but the project sponsor provides final approval. The sponsor’s sign-off is what turns the document into a binding commitment.

Applying the Project Charter to Different Professional Fields

While the structure of a project charter stays consistent, its applications vary across industries. What doesn’t change is its role in reducing ambiguity and setting measurable commitments from the start.

In sales and client delivery

When services are being sold, the charter becomes a practical tool to set expectations. It documents goals, scope, and responsibilities in writing, which helps prevent disputes once work begins. For example, a software vendor delivering a custom application can use a charter to confirm requirements, milestones, and resource commitments with the client before development starts. By formalizing this alignment, both parties avoid the miscommunication that often leads to contract friction or scope creep.

In project management

Within traditional project management, the charter is the anchor for all subsequent planning. It ensures the project manager is working toward agreed objectives and has authority over resources. As the project progresses, the charter provides a baseline to check whether the work is staying within scope, time, and budget. Capital project research shows that projects with well-defined charters and front-end planning have consistently lower costs and fewer late-stage changes.

In business strategy

Organizations also use charters when launching new initiatives tied to long-term goals. For example, a company entering a new market might draft a charter that outlines budget, staffing, risk assumptions, and expected performance metrics. This ensures leadership alignment before money is committed. Charters at the strategic level are valuable because they force decision-makers to identify KPIs at the outset, making it easier to assess whether a new initiative is delivering as intended.

In process improvement and ERP projects

Process improvement frameworks like Lean Six Sigma build the charter into their methodology. In the Define phase of DMAIC, the charter establishes the problem statement, objectives, and expected benefits. Without this, improvements risk being made in areas that don’t matter to business performance. Similarly, Gartner notes that by 2027, more than 70% of ERP initiatives will fail to meet original business goals—often because objectives and success measures were never clearly documented at the start. A properly written charter directly addresses that risk.

Common benefits across contexts

Across industries, the benefits of using a project charter are consistent:

• Clearer alignment between stakeholders.
• Fewer disputes over scope or responsibilities.
• Reduced waste from late rework.
• Measurable improvements in cost and schedule performance when early definition is strong.

The adaptability of the charter is part of its strength. Whether it’s guiding a client engagement, a capital project, a strategic initiative, or a process improvement program, the principles are the same: clarity upfront improves execution later.

Using VirtoSoftware for Planning in the Context of a Project Charter

A project charter provides direction, but to deliver on its commitments, teams need ways to track deadlines, roles, and deliverables day to day. This is where project management tools make the difference—turning the high-level commitments of the charter into visible, actionable work. For organizations running on Microsoft 365, Virto’s suite of apps aligns closely with the charter’s purpose.

Virto Gantt Chart

Milestones and schedules documented in the charter can be translated into an interactive Gantt chart. Virto Gantt Chart for Microsoft 365 and SharePoint lets teams map dependencies, adjust timelines, and visualize the project as it progresses. 

Purpose & value: Converts charter milestones and schedules into a dynamic, visual timeline. Users can drag and drop tasks, set dependencies, adjust timelines, and color-code activities for clarity and emphasis—making timeline discipline intuitive .

Key functionality:

• Display tasks from multiple SharePoint lists in one consolidated Gantt view.
• Support various time scales—day, week, month, quarter—for flexible visualization.
• Fully customizable task forms (e.g., choose which fields show, such as name, deadline, and resources) and offer auto-scheduling so child tasks update when parent dates change.
• Export to PDF for sharing or documentation .

Integration & fit: Runs in both SharePoint Online and on-prem environments (2016/2019/SE) with tight SharePoint integration.

Why it matters for the charter: Keeps milestones and dependencies visible and up to date—helping the team manage the timeline laid out in the charter and respond proactively to shifts.

Virto Kanban Board

Roles and responsibilities outlined in the charter can be tracked in real time through Kanban boards. Virto Kanban Board allows tasks to be assigned, categorized, and monitored across stages. By visualizing work in progress, teams can prevent bottlenecks and make accountability clear—directly supporting the charter’s role in avoiding duplication of effort.

Purpose & value: Turns roles and tasks defined in the charter into an agile, visual board. Teams can manage tasks through swimlanes, set priorities, and enforce accountability.

Key functionality:

• Display SharePoint lists as customizable Kanban boards within SharePoint or Teams.
• Support subtasks and parent-child task logic—recognizing bottlenecks, refining estimates, and planning daily steps .
• Include features like WIP (work-in-progress) limits, filters, board statistics, templates, comments, attachments, tags, and history tracking .

Integration & fit: Built for Microsoft 365; integrates seamlessly with Teams and SharePoint, so users don’t need to switch platforms. Also available for on-prem environments (2016/2019/SE).

Why it matters for the charter: Makes roles and deliverables visible, tracks work-in-progress, and aligns task execution directly with the responsibilities outlined in the charter.

Virto Calendar

The deadlines, constraints, and dependencies captured in the charter often span multiple systems—Outlook, SharePoint, Planner, even iCal calendars like Google Calendar. Virto Calendar consolidates these sources into a single view. This central scheduling hub ensures that milestones defined in the charter don’t get lost in siloed calendars, making project timing transparent to all stakeholders.

Purpose & value: Aggregates schedules, deadlines, and milestones across various systems into one unified calendar view 

Key capability:

• Overlays events from Outlook, SharePoint, Planner, Exchange, Google Calendar, and more—color-coded and centralized.
• Ideal for coordinating dependencies, milestones, and stakeholder availability without toggling between multiple calendars.

Integration & fit: Fully embedded in Microsoft 365, Teams, and SharePoint for a smooth workflow. Available on-prem for 2016/2019/SE.

Why it matters for the charter: Prevents charter-defined deadlines from getting lost in siloed tools; ensures transparent timing visibility for the entire team and stakeholders.

Virto Shared Calendar

Some projects require simpler, client-facing scheduling. Virto Shared Calendar is built for this purpose, allowing events and timelines from the charter to be shared externally without requiring Microsoft accounts. It is especially useful for client onboarding, event planning, or vendor collaboration, where transparency must extend beyond internal teams.

Purpose & value: A lightweight, client- or vendor-facing calendar solution that doesn’t require recipients to have Microsoft 365 accounts.

Key capability:

• Easy sharing of timeline-related events—perfect for onboarding sessions, external coordination, or simplified communication.

Why it matters for the charter: Extends visibility beyond internal teams, making charter timeline commitments transparent to clients or external collaborators—without friction.

From document to execution

The measurable benefits of project charters—fewer changes, reduced cost overruns, better alignment—depend on keeping commitments visible once the project is underway. Virto’s tools ensure that milestones, tasks, and deadlines set out in the charter remain front and center throughout execution. The result is not just a better-defined start, but a more controlled and accountable finish.

Project charters set direction, but execution depends on day-to-day visibility of commitments. VirtoSoftware’s suite makes that possible:

• Gantt charts bring chartered timelines to life and help monitor adherence.
• Kanban boards track execution and accountability against chartered responsibilities and deliverables.
• Calendars, both internal and shared, keep milestones and dependencies firmly in focus—internally and externally.

Together, these tools embed the charter’s intent into the daily rhythm of work—enabling the measurable benefits that upfront planning promises.

Conclusion on Project Management Charter 

A project charter is the foundation that determines whether a project will stay aligned, on budget, and within scope. Research consistently shows that projects with well-defined charters and strong front-end planning achieve lower costs, faster schedules, and fewer late-stage changes. By capturing objectives, roles, timelines, and risks early, teams create a reference point that keeps delivery focused and measurable.

Yet the charter only has value if its commitments are carried through to daily execution. That’s where VirtoSoftware’s Microsoft 365 apps make the difference: Gantt charts bring timelines to life, Kanban boards keep responsibilities visible, and calendars keep deadlines clear across teams and clients.

To see how these tools can support your own projects, you can schedule a demo call with the VirtoSoftware team or start a free trial and test them in your own Microsoft 365 environment.

For further reading visit our resources:

• Project management hub
• Enterprise project management software
• AI in project management
• Enterprise project management overview

A charter gives your project its mandate. VirtoSoftware’s tools give it the visibility and discipline it needs to succeed.