Place gelatin and water in a small microwave-safe bowl. Let stand for 2 minutes. The gelatin will soften.
Meanwhile, pour whipping cream into bowl of a stand mixer with the whisk attachment. Whip at medium speed just until very soft peaks form.
Microwave gelatin mixture in 10-second intervals, watching carefully, until gelatin is fully dissolved in water, and no gelatin granules remain. Be careful not to overheat.
Add a few tablespoons of whipped cream to gelatin. Stir gently to combine until no lumps remain. (This ‘tempers’ the gelatin, so it won’t seize up when added to the bowl of whipped cream).
Add powdered sugar and vanilla to whipped cream. Beat until soft peaks form.
With the mixer on medium speed, slowly pour in the gelatin mixture in to the whipped cream. Continue to beat until stiff peaks form. Be careful not to overwhip the cream!