In a large mixing bowl, combine softened cream cheese, powdered sugar, and vanilla extract. Beat until smooth and creamy.

Gently fold in Cool Whip or whipped heavy cream until fully blended and fluffy.

Add green food coloring one drop at a time, mixing thoroughly until the desired shade is reached.

Transfer the Grinch Dip into a serving bowl and sprinkle with red heart sprinkles. Chill for 30 minutes before serving.

Serve with dippers like gingerbread cookies, pretzels, or fresh fruit slices.