A charity accused of carrying out questionable fundraising activities has been struck off the charities register after a five-month investigation by the sector's regulator.

Care 4 Kids Foundation of Australia collected nearly $1 million through door-knocking, supposedly to benefit disadvantaged children who had fallen behind in school work.

However, an investigation by 7.30 revealed that the $509,180 supposedly paid to beneficiaries since 2011 had in fact been paid to two tutoring companies wholly owned by Michael O'Connor, the son of Care 4 Kids Foundation's two directors.

When 7.30 confronted Mr O'Connor about his companies' activities he said he had no knowledge of the children they supposedly tutored, or about the financial dealings of the charity.

The companies did provide some tutoring to several disabled and low-income children, via tutors in the Philippines.

However, Care 4 Kids director Michael Johnston could not explain where the bulk of the money collected had gone.

The $10,000 consultancy fee he says he received from the two tutoring companies was also not disclosed in the charity's financial statements.

The Australian Charities and Not-For-Profits Commission (ACNC) launched an investigation and today deregistered Care 4 Kids and Indigenous Foundation of Australia, another charity run by Mr Johnston and Edna O'Connor.

Indigenous Foundation also purported to provide tutoring to disadvantaged Indigenous children and collected money solely through door-knocking.

New applications by charity founders to be scrutinised

Charities commissioner Susan Pascoe said the very rare step to strike the organisations off the list was taken because their activities were not solely charitable.

"This is a win for the charity sector," Ms Pascoe said.

"It wants the small number of charities who don't do the right thing to be struck off so the good reputation of the sector can be protected."

Ms Pascoe is prohibited by privacy laws from saying whether any evidence of criminal activity was found during the investigation.

However, she said any applications by Mr Johnston and Ms O'Connor to register a new charity would be closely scrutinised.

The Federal Government paid $175,000 to Care 4 Kids for employing door-knockers who qualified for a government wage subsidy.

Mr Johnston and Ms O'Connor had previously been involved with for-profit tutoring companies which had been forcibly wound up by the Australian Securities and Investments Commission (ASIC) for failing to pay tutors and not providing education services students had paid for.

Since its inception, the ACNC has received 900 complaints about charities. In general, it works with charities to try to rectify problems.

Care 4 Kids and Indigenous Foundation are only the second and third charities it has struck off the register in 18 months.

However, the ACNC says that by working with charities it has protected $78 million in assets from being misused or moved offshore in the past four months alone.

In a statement to 7.30, Consumer Affairs Victoria acting director Phil D'Adamo said his organisation is aware of the decision to deregister Care 4 Kids as a charity.

He said the body is now considering information provided by ACNC in respect to Care 4 Kids' registration as a fundraiser in Victoria.