When you say the funding is good, are you referring to synchro or "A" envelope skaters?
I'm interested in knowing more about your suggested approach. How do you see that working? Correct me if I'm wrong, but I think only the "super elite" competitions offer financial awards for any skater athletes right now.
Well, here is my observation and thought: To simply rely on enthusiasm of the fans or the scarification of the family will not able to change the loss popularity of the skating here.
If we look through the kids' eyes, they have a lot choices: school basketball team, school volleyball team, school soccer team, school hockey team, and more. Even the other individually-played sports, such as swimming, diving, fencing, gymnastic, track and field, there are also middle or high school teams and the competitions system among school level is available for the individual-played players. Meanwhile, all these K-12 sports can find the same matching team schema in the college level, and the colleges have motivation to provide tuition-waived type of scholarship for the players. Considering the soared college tuition and the numbers of players they recruit, the attraction of potential financial outcome for the family/kids is irresistible。
Now lets look at Figure Skating. There is no school team in neither middle school nor high school, as well as no school level competition. The skaters are on their own. No matter if they win or lose in the competition, nobody else cares except of the players themselves. Most of colleges don't care as well, even there is intercollegiate figure skating competition. The result is: After hundreds of thousands dollars spent for skating, the family/player will need to prepare almost same amount of money for college by themselves? Maybe the few of the top 3 can have some sponsorship to carry on, but most of others will make the obvious move to quit for sure. Actually, many parents who were skaters before discourage their kids to go through the same path, because of the unpleasant memory of huge spending without the same meaningful return in their past. (side note: There are coaching opportunity out there, but I won't comment on the fight among coaches over the skaters or other rink-politics scenarios. From what I heard so far, it is not easy at all, it is tough...)
In long run, I think that a competition system gets middle-high school/college involved might help a lot, based on the reason mentioned above. The goal is to have the college Admission Office to consider the skater as same as the players in other sports. If that comes true, it would come with both financial support and education support, which can be a big boost among general interest and popularity.
In short run, some financial rewards in different level competitions (novice, intermed, or might be even pre-juv) can be helpful. The amount of the award might not be significant, but this can be an alternative to get public attention before the long term plan works out.
Just my 2 cents.