The US Bureau of Engraving and Printing is not entirely correct. In addition to Martha Washington, Pocahontas was on the backs of the $20 Compound Interest Notes of 1864 and the $20 National Bank Notes of 1875. Beyonce and Sally Ride are both still alive. Living people have appeared on US coins and paper money, but it is exceptional and usually considered bad form. Technically, it is not supposed to happen, but in modern times "special" legislation has allowed it. (In times gone by putting the face of the person responsible was deemed appropriate enough. Living presidents often appeared on private currency and scrip.)
Spencer M. Clark (1810-1890) served under Abraham Lincoln as the the first Superintendent of the National Currency Bureau (now known as the Bureau of Engraving and Printing). He had his own portrait placed on these notes, an act that (once discovered by his superiors) led to legislation preventing a portrait of a living person from appearing on Federal currency. -- http://www.papermoneyfacts.com/five_cents/fractional_currency_five_cents_clark.htm
No mention of that at the BEP biography of Mr. Clark here. Spencer M. Clark was ordered to put William Clark (of Lewis & Clark) on the emergency fractional notes, but took the orders for "Clark" to mean himself.
Alive and well Alabama governor T. E. Kilby appeared on the 50-cent Alabama Centennial commemorative of 1921.
... and Eunice Kennedy Shriver on the Special Olympics commemorative dollar of 1995:
(David Lawrence Rare Coins)
(Edited by Michael E. Marotta on 8/08, 3:57pm)