In 1800, a Baltimore merchant named William Taylor sent his recently freed indentured servant, John McDonogh, to New Orleans to work as a merchant on his behalf.  Having established himself as a merchant, McDonogh turned his attention to property acquisition. Although he owned a large number of slaves, McDonogh somewhat departed from the traditional concept of slave labor by allowing his slaves to work for profit for half a day each week; with this money, they could eventually buy their freedom. He also provided his slaves with technical training and an education to prepare them for free life. McDonogh also worked with and supported the American Colonization society, so it is unsurprising that many of the people he enslaved moved to the society-sponsored Liberia upon attaining their freedom. 
Much of McDonogh's early financial success came from his merchant shipping business. Ships would sail from Baltimore to New Orleansladen with anchors, paints, hardware, molasses casks, hoops for hogsheads, glassware, bricks, bagging, rope, candles, provisions, and dry goods. In turn, McDonogh would send ships filled with cotton, sugar, molasses, flour, indigo, and logwood back to Baltimore. By the year 1804, McDonogh had reached the peak of his mercantile success. 
According to William Allen, McDonogh’s first biographer, McDonogh retired from mercantile life in 1807 and began his dealings in real estate.  It was in his land dealings that John McDonogh made his vast fortune. The first pieces of property McDonogh acquired were large tracts in West Florida, which he bought from the Spanish government.  Eventually, he had acquired so much land that he became the largest landowner in the United States at that time. 
In his dealings with land property, McDonogh developed a unique scheme to maximize profits from this ownership: he rented his properties in respectable neighborhoods to brothel owners. When the neighboring families moved away from their homes, McDonogh bought their properties for an affordable sum. He then evicted the brothels and rented the properties to reputable families again. As a landlord, McDonogh did little to maintain his properties, earning him a reputation as a slumlord. 
After his death in 1850, it was revealed that McDonogh willed his immense fortune and lands to poor children, white and black, so they could get an education — McDonogh had been long invested in the education of the poor. Today, close to 40 schools are built on his former lands, honoring his commitment to education. 
During his lifetime, he was known as a miser. Even his obituary recounted, “[m]any traits of benevolence are cited to him on good authority, notwithstanding the general opinion to the contrary.”  Upon his death, however, McDonogh earmarked his significant fortune to establish “a free school for poor children of all classes” in both New Orleans and Baltimore. His will also freed specified slaves, including arrangements to send them to Africa. His heirs contested his will and the case, ‘McDonogh’s Executors v. Murdoch’, went all the way to the Supreme Court in 1853. The court ruled against the heirs, allowing for McDonogh’s generosity to for the erection of a large number of John McDonogh schools in New Orleans. 
McDonogh was buried in the McDonoghville Cemetery, which sits on his massive former property in what is now Algiers Point. As the Times-Picayune reported, “Mr. McDonogh was buried yesterday afternoon in the cemetery erected by himself, near his residence, at McDonoghville, for his negroes. It was his wish that he should be buried among them.” McDonogh has a complex legacy, and is remembered both for his exploitation of the brothel system and slaves during his lifetime, along with his philanthropic donations upon his death.