Hi Nina,
this is a tough question. Number one, most of us are able to give but unable to receive so your younger sister may be accurate in telling you that you have difficulty...this is something you may want to examine for yourself.
There is also a fine line in your sister's giving. This may be the way she feels she can contribute even though she is over extending herself. She may even be doing it for approval and acceptance or even out of guilt. And then again, she may be doing it to feel like she is in control. Are these gifts something that you and Lou can use to increase the quality of your life? Is she your baby sister or older sister? Do the other family members who say she is feels she is taking care of you have anything at stake here? There may be many family dynamics that are coming into play here.
I know you are a god loving spirit, Nina. Perhaps if you could approach her from your viewpoint where the material things are not as important rather than "I feel bad about it but I can not and will not try to match her gift for gift thus accepting her lifestyle. I try to persuade her against this lifestyle. " This may not be the issue. If you can really come from your heart and explain what you are feeling from your truth, you may make some progress. It might also help her to open up and see her own neediness and she may become clearer on her own reasons for gifting you.
I hope this helps...Richest blessings angel
Gail