Thomas Macdonald, later known as Thomas Kennedy Macdonald and familiarly as 'Kennedy Mac', was born at Boulogne-sur-Mer, France, on 6 April 1847, the son of Scottish parents Thomas Rhine Macdonald, a flax-dresser, and his wife, Jean Aitken. He was educated in Dundee, Scotland, and at Hare's Private Academy in Adelaide, South Australia.
In Melbourne, on 15 November 1870, Macdonald married Frances Rossiter. They were to have three sons and to adopt a daughter, a niece of Frances Macdonald. Kennedy Macdonald arrived in Wellington, New Zealand, from Australia in July 1871 and worked for a time as an accountant with the firm of Jacob Joseph and Company. That year he established his own company, T. Kennedy Macdonald and Company. This grew to include land, estate and general agencies, sharebroking, auctioneering and commission agencies, and operated throughout the Wellington province and beyond. He conducted it alone until the late 1890s when he took Alexander Lorimer Wilson as a partner. Macdonald's expertise in land matters led to his appointment in the 1880s as auctioneer, auditor and umpire to the Wellington and Manawatu Railway Company. Following the Government Advances to Settlers Act 1894 he became valuer for lands from 1895 to 1901.
A strong protectionist who played a significant part in the New Zealand Industrial Protection Association, Macdonald vigorously aided the development of local industries and businesses by promoting companies. In 1882 he arranged the sale of James Gear's meat business and its transformation into the Gear Meat Preserving and Freezing Company of New Zealand, and he saved the Wellington Woollen Manufacturing Company from insolvency by directing it from 1886 to 1896. In 1909, fired by a visit to irrigation works overseas, he urged the development of poor-quality land and care for the environment.
Macdonald was a member of the Wellington City Council in 1877 and 1878. At a large public meeting in 1888 he successfully opposed the council's proposals for reclaimed land at Te Aro, thereby saving the city treasury a large sum of money. For a time he was senior city auditor. He was a president of the Wellington Chamber of Commerce in 1884 and chairman of the Wellington Harbour Board from 1906 to 1907.
A Liberal in politics, Kennedy Macdonald was MHR for City of Wellington from 1890 to 1891. Valued for his knowledge of the laws affecting land, he was a member of the royal commissions on the Public Trust Office in 1891 and on the purchase of the Polhill Gully rifle-range in 1892. However, a bankruptcy claim forced his retirement from the House, and although a discharge was granted he was not re-elected in 1893. In 1903 the premier, R. J. Seddon, appointed him to the Legislative Council; he retired in 1911.
In the 1880s Macdonald was a member of the Wellington Athenaeum and Mechanics' Institute and the council of the Fine Arts Association of New Zealand. As superintendent of sports for the Caledonian Society of Wellington he helped to form the Wellington Bowling Club.
Frances Macdonald was a woman of great personality, breadth of view, warm-heartedness and generosity. She was a leader, together with Louisa Seddon, in the Women's Social and Political League of the 1890s. She welcomed the opportunities given by the franchise for women to take a 'deeper interest in life [and be] more intellectual and better companions for their husbands and the masculine gender generally', and she endeavoured to make the women of the city understand and value their political privileges. She travelled, and her home was full of works of art. The family's residences included Inverlochy House off Abel Smith Street and Somerled House at 192 The Terrace. In 1882 Macdonald owned property in the city to the value of £6,275.
Kennedy Macdonald was bearded and bespectacled (sometimes he wore a monocle), with an ample figure and an optimistic, genial personality. He was admired for his pluck and resilience in the face of bankruptcy, a fire that destroyed the firm's premises, and the loss of three small sons during a scarlet fever epidemic in 1876. Well-read and outspoken in upholding his principles, he was an eloquent public speaker. He was a man of vision who expended his great energy and skills on the city. Five Wellington streets were named for him or for members of his family. His last years were clouded by a trusteeship case that went against him; he was granted a discharge after five doctors testified to his poor health.
On 29 November 1913 Kennedy Macdonald was admitted to Porirua Mental Hospital. He died there of 'Chronic Brain Disease' on 17 October 1914. His wife, Frances, died on 11 April 1921. They were buried with their sons in the Sydney Street cemetery. Their adopted daughter, Vera, was married in 1907 to Joseph Parker, editor of the Evening Post from 1916 to 1942.