Donohue had an accident on August 17, 1975 during the warm-up for the Austrian Grand Prix . In the accident, which was probably caused by a defective tire, his car overturned several times and smashed against a billboard. A marshal was killed in the accident. Donohue didn't seem seriously injured at first, but one day later he fell into a coma and died of a blood clot in his brain. He was buried in the Summit local cemetery.
Donohue's wife filed for damages against the tire manufacturer in the USA, which in 1984 was decided in favor of the widow, despite inconclusive evidence. However, the feared flood of litigation due to this precedent did not materialize. His son David Donohue is also a racing driver.