The correct answer is living organisms create order locally, but the energy transformations generate waste heat that increases the entropy of the universe as a whole.
From energy (i.e. from the sun, the main source of energy), organisms create order locally by creating cells with organized organelles such as the mitochondria, chloroplasts, Golgi apparatus etc. This cells are ordered to make tissues, organs, organ systems, and eventually, whole organisms as higher order structures. But then again, doing so needs several various chemical reactions to take place wherein heat is produced as a waste product. Heat is an unusable form of energy thereby increasing the entropy (or disorder) of the universe.