Until the 1850's, nearly all Jerusalem residents lived within the Old City walls. It was considered dangerous to stay outside the walls at night because marauding thieves prowled around the city and residents preferred feeling safe inside the walls, despite the crowding and poor sanitary conditions.
In the mid 1850's a number of initiatives began to take shape, proposing that residents leave the Old City and build in the vacant areas surrounding its walls. One of these initiatives was led by Sir Moshe Montefiore, the Jewish British philanthropist.
During three earlier visits to Jerusalem, Montefiore witnessed the difficult housing situation and lack of livelihood suffered by the city's Jews and he attempted to help them in various ways. In 1855, during his fourth visit to Jerusalem, Montefiore purchased a large tract of land to the west of the Old City. This purchase was made possible through the estate of the American Jewish philanthropist Judah Touro, who bequeathed a substantial sum to the Jews of Jerusalem. Initially, Montefiore planned to erect a hospital on the land, but after learning that the Rothschild family had already founded a hospital inside the Old City, he decided to change his plans and instead build a residential neighborhood for Jerusalem's poor.
In 1857 a windmill was erected at the edge of the site, to serve as a source of income for neighborhood residents. Some 20 2-room apartments were then built on the land, as were two synagogues – shkenazi and Sephardic – and a Mikva (ritual bath). The apartments were built within a single long building in order to increase residents' sense of security and to make it easier to protect. A sign featuring the name of the neighborhood, "Mishkenot Sha'ananim" was placed atop the building. The drawing that appears on the stamp was adapted from an etching published in 1874 in a book by Englishman Reverend Samuel Manning.
The apartments were initially intended for poor families, who would receive them for periods of three years, however virtually no residents were willing to leave and settle outside the Old City walls, as they feared the marauding thieves. Thus it was decided to give the apartments permanently to those who agreed to move in. Occupants had to sign a detailed set of regulations, intended to ensure the cleanliness of the apartments and prevent crowding like that in the Old City. Mishkenot Sha'ananim made a great impression on tourists visiting Jerusalem, who noted it as one of the nicest buildings in the city. The Mishkenot Sha'ananim project served as an example to the Jews of Jerusalem and in subsequent years many residents organized to establish other Jewish neighborhoods outside the Old City walls. The First Day Cover features a list of nine Jewish neighborhoods that were founded in the first wave, which continued through the 1870's. The FDC also features the seal of the "Moshe Montefiore Company" which was founded in order to continue developing the rest of the land upon which Mishkenot Sha'ananim was built.
Mishkenot Sha'ananim currently serves as an international cultural and conference center in Jerusalem, established by the Jerusalem Foundation. The center hosts artistic and cultural activities, in the spirit of dialog, tolerance and pluralism.