Donaldson is also the author of The Giants and the Joneses for children aged 8–12 years. Her teenage novel Running on the Cracks is set in Glasgow and traces the adventures of orphaned half-Chinese Leo (aged 15) who is fleeing from her dodgy uncle in England and trying to find her father's estranged family. She befriends a schoolboy called Finlay, who is loosely based on Donaldson's youngest son Jerry during his days as a paper boy. Running on the Cracks, whose element of mental illness is drawn from Hamish's hospital experiences won the Nasen award in 2011 for its sympathetic and inclusive portrait of Mary, who befriends Leo but then descends into a severe relapse of her bi-polar condition.
In 2011, Donaldson was appointed Children's Laureate succeeding the illustrator Anthony Browne. In keeping with her interest in acting and singing Donaldson has set out to encourage children to perform poetry, plays and dramatised readings to generate a love of books and of reading. Accordingly, she has created a series of Plays to Read for six characters to be performed in the classroom, written by herself and by other writers such as Geraldine McCaughrean, Jeanne Willis, Vivian French, Steve Skidmore and Steve Barlow. The first 36 of these plays, for early readers, were published by Pearson (2013) with a further 24 plays for older primary-school children to following later in the year. She has also compiled an anthology of Poems to Perform by groups of children (to be published by Macmillan in 2013) and has created an interactive website called picturebookplays.co.uk which gives guidance as to how selected picture books can be turned into classroom plays.
She was appointed Member of the Order of the British Empire (MBE) in the 2011 Birthday Honours for services to literature. She was promoted to Commander of the Order of the British Empire (CBE) in the 2019 New Year Honours.
She was awarded honorary doctorates by the University of Bristol in 2011 and the University of Glasgow in 2012.