School is Pressuring to Donate Money

My question involves education law in the State of: Indiana

My child attends public school. Every year we buy our own supplies and also pay for school books for a school year. On top of that every Fall school is asking to donate money.
They aren't just asking, they place stickers on student's homework, they send out newsletters and printed newsletters and saying what type of rewards are awaiting students if they'll meet a certain financial goal per class. The school even says that students will get an extra day off if the class will meet a $5000 goal...

I am unemployed and we have very tight budget (only 1 family member works). I feel if I don't donate, my child's grades will suffer.

Is it even legal for public school to be asking students parents for money? Don't they get government funding???
Also they keep forcing to buy books for classes and ask very strongly to buy other stuff from school. I feel the school is a marketplace not a school.

You "feel like" your child's grades will suffer, but there's no actual reason to suspect that there will be any effect on your child's grades.

If you want, you may take the issue up with the school administration or school board.