After returning to England in May 1834, Donaldson travelled to Sydney, New South Wales, aboard the Emma Eugenia where he arrived on 5 May 1835.

In 1848, Donaldson was elected a member of the original unicameral Legislative Council of New South Wales, representing the County of Durham from February 1848 to January 1853.

[2] Comments made while running for re-election in 1851, led Sir Thomas Mitchell to demand a public apology.

[2] In March 1856, Donaldson was elected to the newly created Legislative Assembly of the first Parliament, representing Sydney Hamlets.

A third son, Sir Hay Frederick Donaldson, who became an eminent engineer, went with Lord Kitchener on a special mission to Russia in 1916 and died when their ship, HMS Hampshire, struck a German mine off the Orkney Islands.