Morningside Orphanage was the orphanage that Penny once resided in in The Rescuers. The orphanage is home to many orphans, including Penny. Rufus also resides in the orphanage to get rid of the mice, as well as keep the children company.
One day in the orphanage, Rufus saw Penny looking sad. She was upset that a family looked at her for adoption, but then adopted a red haired girl instead, who Penny claims to be prettier than her. Rufus cheers her up with his poem, "Faith is a Bluebird". Shortly after that, a strange woman comes up to Penny and asks Penny to come with her. Penny refuses, but the woman takes her anyway. Rufus told the story to Bernard and Miss Bianca when they investigate Morningside Orphanage to see why Penny needed help.
The orphanage is then seen at the end of the film during a news program, where Penny is finally adopted.