The new funding is part of a wider counter-terrorism finance strategy headed by economic secretary to the Treasury Ed Balls and Home Office minister Tony McNulty.
The funding comes in advance of a joint report by the two government departments on terrorist abuse of charities, which is expected at the end of this month.
"This is about leaders making sure the Charity Commission has the resources it needs," said a Treasury spokesman. "The bulk of the sector is very happy with the Charity Commission helping to institute best practice."
However, it is unclear what "instituting best practice" consists of.
The Treasury said that the commission was free to decide how to spend the £1m, but a commission spokeswoman said nothing would be decided until discussions with the Treasury had taken place.
The next comprehensive spending review will decide whether the £1m will be allocated beyond next year.
Mahmood Hassan, chairman of Muslim relief charity Islamic Aid, warned the commission to tread carefully. "If any group uses charities for inappropriate purposes then this should be stopped," he said. "If research is done sensitively, there would be no harm. The problem is that, if donors get scared of giving money to major Muslim charities, these charities will fail.
"If there is constant suspicion, this will drive Muslim charities underground and they will be even more difficult to regulate."
The commission said it acted "independently and without bias". The regulator's spokeswoman said: "We've done a lot of work to build constructive relationships with Muslim and other faith charities."
In January, the NCVO criticised the Government's terrorism initiative on charities as "misguided" and "draconian", saying it should be working to engage charities rather than alienate them.
Belinda Pratten, senior policy officer at the NCVO and co-author of the umbrella body's report on terrorism and charities, said: "We want the Government to engage with us about what the risks are and what is already being done to address them."
Nick Aldridge, director of strategy and communications at chief executives body Acevo, said: "We're working closely with the NCVO to monitor the ongoing review of the charity sector. Like the NCVO, we've been concerned at some of the alarmist language around this issue and are awaiting the outcome of the review."