The Charity Commission has warned the IPPR think tank that it “exposed itself to the perception that it supported the development of Labour Party policy” because it allowed Labour policies to be announced at the launch of one of its reports.

The regulator was prompted to look into the Institute for Public Policy Research after receiving a complaint from Conservative MP Charlie Elphicke that it supported the Labour Party, in contravention of charity law.

Elphicke had alleged that the charity worked closely with the Labour Party to produce its report called Condition of Britain – Strategies for social renewal, which was launched by Labour leader Ed Miliband (pictured) in June.

He also complained that the IPPR had undertaken a research commission from a shadow Secretary of State relating to jobseeker’s allowance, though this turned out to be untrue.

The Commission found that Condition of Britain was independently commissioned by the charity and not funded by or at the request of a political party.  It was editorially independent and financed by various groups and individuals. “We consider that the report advances charitable purposes to educate the public,” it concluded.

However, the regulator also said that the charity could have been considered to be supporting Labour policy because there was close involvement with Labour throughout the project, Miliband spoke at the high-profile launch, and Labour Party policies were announced there.

The charity told the Commission that politicians from other parties have announced policies at other IPPR events; however, the regulator considered that because of the high media profile of this particular launch, perception of the charity’s independence “could have been adversely affected”.

As a result, it provided the trustees with regulatory advice.

In its operational compliance case report published yesterday, the Commission said: “The guiding principle of charity law in terms of political activity is that charities should be, and be seen to be, independent of party politics. This is particularly important for charities such as think tanks which operate in the political sphere.

“They should be careful of becoming associated in the minds of the public with a particular political party and should always ensure that their independence and political neutrality are protected in all that they do.

“Inviting speakers associated with a particular political party carries risks for a charity, which trustees are expected to manage and mitigate. Where this happens on a regular basis, we would expect a charity to have a written policy and clear procedures in place to manage the risk and protect its reputation. It should also be able to demonstrate evidence of engagement with politicians from across a range of parties in the totality of its work.”

The IPPR responded: “We welcome the finding by the Charity Commission that our work is editorially independent and advances charitable purposes, and the recognition that we work with all political parties. We will take forward their advice to ourselves and other think tanks on how to ensure the perception of political independence in future.”

The Commission also examined a media report claiming that the charity had received donations from the Trades Union Congress and published a report calling for more trade union power.  But it found that although the TUC had given the IPPR three grants in 2013, these were for separate reports on tax reform, OECD labour markets and commercial energy efficiency and there was no evidence that it had recommended calling for “more trade union power”.