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McDonald also enjoyed a career in football management, with DOVO, De Graafschap, Ajax Cape Town, SC Cambuur, VVOG, Sligo Rovers and AS Trenčín. As manager of Sligo Rovers, McDonald tried to sell Séamus Coleman whom he did not rate as a footballer. McDonald was sacked shortly afterwards and barely two seasons later Coleman was signed by English Premier League side Everton whom he would go on to captain as well as becoming captain of the Republic of Ireland national team.
He returned at amateurs DOVO, based in Veenendaal, in April 2010, accepting an offer to become the club's interim coach until the end of the season. He joined amateurs VV Nunspeet in January 2013, and stayed with the club on the following season as well; in November 2013, it was confirmed he would leave the club by the end of the season.