Throughout his tenure as Bishop of Charlottetown, McDonald resided in Rustico, where he had also lived as a missionary.

A church dedicated to St. Augustine was built there in 1838 under McDonald's supervision and served its purpose for many years.

Realizing that the welfare of his priests in the Diocese was important, Bishop McDonald founded the St. Bernard's Society, which would provide for the care of the priests who became inactive due to old age, illness, or other reasons.

Ill for some time, McDonald moved from Rustico to St. Dunstan's College shortly before his death.

Following his death on December 30, 1859, a large funeral mass was held in Charlottetown, and the Bishop's remains were interred in his native home of St. Andrew's.