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The in-line script that you call is single-quoted (as it should be). This means that the sh -c shell will get a script where "${SearchTerm}" is unexpanded. Since that shell does not have a SearchTerm variable, its value will be empty.

With bash, you can pass the name of an exported function:

# Our find function.
# Takes the name of a test function that will be called
# with the pathname of a directory.
myfind () {
    local thetest="$1"

    # Run find, passing the name of the function into the in-line script.
    find . -type d -exec bash -c '
        testfunc=$1; shift
        for dirpath do
            "$testfunc" "$dirpath" && printf "%s\n" "$dirpath"
        done' bash "$thetest" {} +
}

# Our test function.
test_md_file () {
    [ -f "$1/${1##*/}.md" ]
}
export -f test_md_file

# Run the thing.
myfind test_md_file