Searching on the Internet for such things was the first thing I did after those episodes with Kinderheim 511
) I didn't find anything about orphanages. BUT I did get something confirmed: during WW2, a certain Joseph Mengele (I hope I spelled that right) conducted various experiments on children in concentration camps. And he was just the nastiest of the nasty cause eugenics were quite fashionable back then - and a while afterwards... I suppose Monster was inspired by THAT and a few other conspiracy theories I've heard of (The Nazis trying to create the perfect warrior, the Antichrist himself; going as far as brain-washing and creating UFO-like aircrafts, bla-bla-bla)...
But hey! If they got people to search for it on the net, one thing's for certain: they did a Hell of a good job blending fiction with history!!!