Project Charter: What It Is and Why It Matters for PMP Candidates

The Project Charter: Where Every Project Begins

The project charter is the document that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities. It is the first major output of project management, produced during the Initiating process group, and the PMP exam treats it as one of the most important documents in the entire project life cycle.

Purpose of the Project Charter

The charter serves several critical functions that PMP candidates must understand:

Formal authorization: Without a charter, the project does not officially exist. It is the sponsor's formal commitment of organizational resources.
Project manager authority: The charter names the project manager and grants them authority to plan and execute the project. This authority comes from the sponsor, not from the PM themselves.
High-level scope definition: It provides a preliminary description of what the project will deliver, sufficient to begin planning.
Link to strategic objectives: The charter connects the project to the organization's strategic goals, justifying why the project exists.

Contents of the Project Charter

The PMP exam tests your knowledge of what belongs in the charter. Key elements include:

Project purpose or justification: Why is this project being done? What business need does it address?
Measurable project objectives and success criteria: What specific outcomes define project success?
High-level requirements: Broad requirements that the project's deliverables must satisfy.
High-level project description, boundaries, and key deliverables: A summary of what is in scope.
Overall project risk: A preliminary assessment of the project's risk profile.
Summary milestone schedule: Key dates and milestones at a very high level.
Pre-approved financial resources: The summary budget.
Key stakeholder list: The initial identification of stakeholders.
Project approval requirements: What constitutes success and who decides.
Assigned project manager, responsibility, and authority level: The PM's name and scope of decision-making power.
Name and authority of the sponsor: Who is authorizing this project.

Who Creates the Project Charter?

This is a frequent exam question. The charter can be drafted by the project manager, the sponsor, a PMO, or a business analyst — but it is authorized (signed) by the project sponsor or the initiator. The project manager cannot self-authorize a project.

In practice, the PM often drafts the charter and presents it to the sponsor for approval. But the authority to approve comes from above, not from the project team.

Inputs to the Develop Project Charter Process

For the PMP exam, know these inputs:

Business documents: The business case (justification) and the benefits management plan.
Agreements: Contracts, MOUs, or SLAs that trigger the project.
Enterprise environmental factors: Government standards, market conditions, organizational culture.
Organizational process assets: Templates, historical information, lessons learned from previous projects.

Charter vs. Project Management Plan

The charter is not the project management plan. This distinction matters for the exam:

The charter is created in Initiating; the PM plan is created in Planning.
The charter authorizes the project; the PM plan defines how the project will be executed, monitored, and controlled.
The charter is high-level; the PM plan is detailed and comprehensive.
The charter is approved by the sponsor; the PM plan is approved by the project manager and key stakeholders.

When the Charter Changes

The project charter is not typically updated during the project. If fundamental aspects change (scope, objectives, the PM themselves), a new charter or formal amendment may be required. This happens rarely and signals a significant project direction change.

Review charter concepts alongside related initiation topics in our PMP study guide.