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Position a rack in the lower third of the oven and preheat to 325°F (165°C). Grease an 8-inch round cake pan and line the bottom and sides with parchment paper, cutting the side strips tall enough to extend about 1 inch above the rim of the pan.
Bring about 2 inches of water to a simmer in a medium saucepan. Set a large heatproof bowl over the saucepan without letting the bottom touch the water. Add the cream cheese, butter, and milk to the bowl and stir gently until the cream cheese and butter are fully melted and the mixture is smooth, about 5 minutes. Remove from the heat and let cool for 5 minutes.
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