Turns out... in the source code of Geany 0.20 says this:
/* set the encoding of the current file */ if (doc != NULL) enc_idx = encodings_get_idx_from_charset(doc->encoding); gtk_combo_box_set_active(GTK_COMBO_BOX(fif_dlg.encoding_combo), enc_idx);
So my problem was I had an ISO-8859-1 file open... then when I went todo CTRL-SHIFT-F, find in files, it defaulted to the charset of the file that was already open. All I had to do was change the encoding of my file (that was already open) to utf8 and the find in files defaulted correctly.