Is it permissible to sponsor the husband's sister, and is it considered like sponsoring an orphan?

There is no harm in sponsoring the sister of the husband; rather, it is an act of devotion and kindness with immense reward. If she is an adult, it is not considered the sponsorship of an orphan. However, if she is under the age of puberty, then it is the sponsorship of an orphan, and the texts regarding the virtue of sponsoring an orphan apply to her.