Funding is one of the least of the Libertarians problems.
The biggest problem with the Libertarians is that they are completely self-delusional. They think that everyone would ultimately agree with them if they just heard their message, and every year, they think the next election will be the one where the finally "break out".
It's not going to happen. They should have had a perfect chance in 2004, with the Republicans running on an overtly moralist, intrusive-government platform. What do the libertarians do? They nominate a candidate with no political experience who brags about how he drives without a license and never files income tax.
Yet still they believe he's the one. There were several libertarians on this board that claimed that Badnarik would win 5% in many states states, and a couple that genuinely believed he would win states. Yet the Libertarians managed their worst result ever, failing to get close to 1% in a single state.
If the Libertarians were really serious about one day becoming politically relevant, they wouldn't nominate some wacko in every district who is destined to poll 0.5%. Seeing that result across the board just reinforces their joke status. If they were serious, they would give real funding and support to a few candidates in a few local races, concentrated in a single state, where they could actually be competitive.
Look at the Vermont Progressive Party. Get a single Congressman, even a couple state legislators somewhere. Don't bother running nobodies for President until you've proven you have actually appeal in a well-funded race.
No kidding, a sudden strong third party needs one of the following:
massive splinter of existing parties: 1860
established candidate running: 1912
two really crappy 2 party choices: 1924 (didn't come close to winning)
self funding billionaire: 1992 (didn't come close to winning)
Those tend to be pretty rare.