Paul Baerwald was born in 1871 in Frankfurt, Germany. His father, Hermann Baerwald, was Director of the Philanthropin, a Jewish high school in Frankfurt, for 31 years. Baerwald left Germany at nineteen to join the investment firm Speyer & Brothers in London, and in 1895 he was sent to work in New York City. Baerwald became a partner at Lazard Freres in 1907. He met Edith Jacobi in New York, and they were married in 1909. The couple would have four children, Pauline, Jane, Florence, and Herman.
In 1914, Paul Baerwald helped found the American Jewish Joint Distribution Committee (JDC), an international relief organization that provides help to Jews suffering as a result of poverty, persecution, natural disaster, or war. He retired from Lazard Freres in 1930 to devote his full attention to philanthropic work, and would serve with the JDC for 45 years, first as treasurer, and then as chairman in 1932 and honorary chairman from 1945 until his death. In 1949, JDC opened a school in Versailles, France, to train social workers. The school was transferred to Hebrew University in Jerusalem in 1958 and was named the Paul Baerwald School of Social Work in his honor.
In addition to his extensive work with JDC, Baerwald served on President Franklin Roosevelt's Advisory Committee on Political Refugees during World War II. He was a close friend of New York governor and senator Herbert H. Lehman, and they collaborated on JDC projects as well as other public and philanthropic works. Baerwald was also a trustee and founder of the New York Foundation; trustee of the Palestine Economic Corporation; treasurer of the Wollman Foundation; and trustee and treasurer of the Soloman and Better Loeb Convalescent Home.
Paul Baerwald died in New York on July 2, 1961.